The shooter had to think the guy had a bomb. I have no idea what information and observations he had to reach that conclusion, but reach that conclusion he did. In the shooter's mind, the guy DID have a bomb.
Otherwise the shooting was not justified.
This isn't a system that works. It's a system that produces this sort of result EVERY SINGLE TIME.
The incident is an aberration from what is desired. All systems have errors, but it's wrong to conclude that this outcome will happen each time. The cops don't like to make mistakes. Organizations with mature leadership use unfortunate incidents as opportunities for improvement. I would not expect any less aggressive activity against terrorists either. No incident produces all or nothing - black and white follow-up.