Contagious fire (sign of fear, panic, and lack of discipline). One guy shoots, very brief pause, and everybody else goes full auto.
The subject did not represent any more of a danger to the firing squad at the time of the shooting than at any other time in the video.
If you can't talk him into dropping it, and he isn't attacking anybody, and you don't want to risk a $15k dog, call for a hostage negotiator. Myself, I'd probably holster it, tell the guy he was giving me the knife and if he cut me 5 guys were going to shoot him while a dog ripped his balls off.