They didn't have to apply visual, because it was B. They CHOSE to. The same situation exists now, under PRE-NAS and the same situation will exist under POST-NAS.
And the points you miss here
SNAREK are:
1. Wether they chose to use "see and avoid" or not, they used it as a primary separation tool and it
failed. I suggest a major contributing factor to this is the extremely high workload experienced by a jet transport crew in the approach phase of flight.
Just think what sort of workload a single pilot in a high performance turbo prop aircraft would be experiencing at this point. Admittedly, more manouverable than a heavier jet and slightly more vision, but same speeds as the jets in this phase of flight and only one pair of eyes, concentrating at this point on possibly 3 or 4 issues at once with "see and avoid" on 2 or possibly 3 VFR aircraft to boot.
2. The same situation in many areas (C over D towers)
does not exist now. On the 27th, when C becomes E over D towers and VFR no longer require a clearance to operate in E, the transcript you have reproduced above may very well become a common occurence.