It isn't as simple as that. They certainly would have known that you couldn't normally shoot Prisoners of War.
However, Queen's Regulations did allow the senior British officer on the scene (who in this case was Lieutenant Morant) to, in certain very specific circumstances, convene a field court martial to deal with spies and similar people and there were orders circulating that said that Boer prisoners wearing British Khaki should be treated as spies.
Morant knew the special circumstances didn't apply (they were intended to deal with cases where it was impossible to hand the defendants over to proper authorities). He had actually protested similar interpretations in the past to his superiors. He also probably knew the orders about Khaki were unlawful.
Handcock and Witton probably didn't know either of those things. When Morant told them about the exceptions that allowed his actions, they believed him.
Having done some reading on this case, I would have had Morant executed as he later killed a Pastor who was a witness to the original shooting of prisoners.
And people should realize that the Boers War was a lot like the Iraq War where they would kill much like today’s terrorists and then blend back in to the country. Morant’s close friend and commanding officer was captured, tortured and killed and mutilated so we can understand some of his rage.
Also, we should remember the Boers many times did not wear uniforms or wore uniforms that took off dead British soldiers. As someone else mentioned, the British solution was to introduce to the world the “concentration camp” where the Boer women and children were herded and mistreated, starved, denied medicines, and generally left to die. It was a shitty war any war you looked at it.