True, there is a mismatch between FR24 and the actual flight path.
From the video posted, the flight path was never within a mile of the approach path, nor the runway. I have landed on that runway a couple of times, and walked through town. That was a low pass westbound along the harbour, and for all intents "over" the built up area of town. That town would be about the eleventh largest town in Iceland, so a built up area by Icelandic standards.