Although I'm VERY pro-gun-rights, I have to confess to being somewhat torn on this issue.
The story in question, I don't believe the guy did anything illegal nor morally wrong, HOWEVER...
If I see someone walking in my quiet residential neighborhood, who I DON'T KNOW...
Number one, I don't know his state of mind or mental capacity. He could be an escapee from the nut-hatch, a developmentally disabled adult, someone who is having a breakdown or got a bad batch of medication, John Rambo having a flashback - these things I DON'T KNOW.
Number two, I don't know if he's responsible. Does he know the 4 rules? Does he consistently obey them? Does he know how much penetrating power the rifle he's holding is capable of? These things I DON'T KNOW.
Number three, Is it loaded? If I can see a magazine inserted, I have to assume it is loaded. Why isn't it in a case? The only reason you'd need it out of a case is if you intend to use it. Does he intend to use it, HERE in this residential neighborhood? These things I DON'T KNOW!
If I saw a man with an AK wandering the streets of my neighborhood, out of the case, magazine inserted, someone not known to me, I owe it to myself and my neighbors to make sure there is not a problem, and sad to say the safest way to do that is to call the police and let THEM do the question asking. I really really HATE that, but I'm not about to take my chances finding out whether he's a maniac who just killed his wife and is just itching for someone else to get in his way.
That said, I think the police should have talked to the guy, made an impression on how alarming his behavior was to the neighborhood, and asked him please, out of courtesy to the neighborhood, get a case for the darn thing for toting when not in use. There have just been too many mall shootings and other incidents for the public not to take seriously the presence of a strange man with unknown intent, carrying an (apparently) loaded assault weapon in an area where that behavior is not typical or commonplace.