A reminder: Israel counts Hamas soldiers as military targets, even when they are out of uniform and in civilian life.
If we apply the civilized world's standards of war then yes, Israelis who are also off-duty soldiers or reservists don't count as military targets.
If we apply Israel's standards, however, they are.
Are Gazans not allowed to apply the same standards to their adversaries that their adversaries openly apply to them? Would you be this courteous, in their position?
A wonderful quote that demonstrates how Israel applies different standards to itself: even its active duty combatants are painted as helpless innocents!
“Nimrod Cohen was abducted from Tank 3”
Israel has to apply that standard because Hamas operates without uniforms unlike IDF. So yeah, Gazans shouldn't apply the same standard because unlike them Israeli military operates in uniforms so it's easy to distinguish between them and civilians. That Gazans do the opposite is on them.
Of the 378 people killed at and around Nova, 16 were off-duty soldiers attending the rave and 4 were killed fighting [1]. That's 20 out of 378 ... so about 5%.
So even by the standard you're proposing, Hamas massacred around 358 people who wouldn't qualify as military targets under anyone's rules of engagement. Including theirs, apparently, since Hamas's own explanation was that they "may have thought" the ravers were soldiers "resting"; i.e. they didn't know and killed them anyway.
The argument you've constructed requires Hamas to have been applying a targeting framework. The evidence is that they found a large crowd of Israelis and opened fire.
[1] https://www.timesofisrael.com/idf-okayed-nova-music-festival...