Perhaps this is by design. Cruise had a failsafe system that detected a collision and decided to pull over but by pulling over it dragged a person underneath the car (or something close to this scenario). Maybe this dumb failsafe was designed not to repeat Cruise's mistakes?

Certainly a better way to handle this would have been to pull over. I think stopping where ever it happened to be is only acceptable if the majority of sensors fail for some reason

What makes you think it was either?

AIUI, it was the irregularity of the uncontrolled intersections combining with the “novel” (from the POV of the software) driving style of the humans. In dense areas during outages signaled intersections don’t actually degrade to 4 way stops, drivers act pretty poorly.

The normal order and flow of traffic broke down. The software determined it was now outside its safe parameters and halted.

Certainly not ideal, and the should be a very strong regulatory response (the gov should have shut them down), and meaningful financial penalties (at least for repeat incidents).

Waymos rely on remote operators to take over when the vehicle doesn't know what to do, and obviously if the remote connection is gone then this is no longer available, and one might speculate that the cars then "fail safe" by not proceeding if they are in a situation where remote help is called for and inaccessible.

Perhaps traffic lights being out is what caused the cars to stop operating autonomously and try to phone home for help, or perhaps losing the connection home is itself enough to trigger a fail safe shutdown mode ?

It reminds a bit of the recent TeslaBot video, another of their teleoperated stunts, where we see the bot appearing to remove a headset with both hands that it wasn't wearing (but that it's remote operator was), then fall over backwards "dead" as the remote operator evidentially clocked off his shift or went for a bathroom break.