It's not hard to figure out why the Marine shot the terrorist.The day before one of the scumbags pretended he was dying or dead and ended up killing a Marine and wounding this Marine in the face.He was tricked once the day before and wasn't going to let it happen again.He killed the terrorist because he leaned a dead terrorist is a safer terrorist.
The Marine sees an insurgent not moving. He moves closer, and sees that the guy is still breathing. Not moving and still breathing is what makes this Marine believe the guy was faking.
Sites points out that the prisoners who were moving were not shot. Again, precisely the point. The Marines come in, presumably talking loudly and making noise. You'd expect to see Iraqis who actually were wounded moaning, moving or doing something. The Iraqis who are acting the way you'd expect don't get shot. The guy who is laying there and not moving, but still breathing, is perceived as a faker, and is shot.