do you know how fast the radar blip was refreshed? do you know how fast the aircraft was descending - 8m/s...modern mode c radar display (typical in civilian operational rooms) is refreshed arround every 4 seconds and the data displayed is not raw data, so there is extra delay. I have no idea what kind of equipment ATCOS had at hand and its capabilities... (havent read the MAK report yet).
so I can only speculate on your question why they didn't a) notice b) react