Going by
the video, he pulled his gun out and pointed it at them in one of the busiest areas in Manhattan.
The police commissioner is also saying that the bystanders were hit by fragmentation off the flowerpots (and you can actually see some impact sparks).
I'm always a bit skeptical of the NYPD (for many historical examples), but this seems like they did they best they could in a horrible situation that fortunately did not end up even worse.