"lost all our instruments" may have simply been a way to express that things were getting progressively worse for them, action-induced or not. I personally don't see a need to get into specifics with ATC at that point.
The report did say this incident started with an A/T message or disconnect which by itself is not a big deal but followed by an ARINC smoke or avionics smoke message, this situation warranted a return in my opinion. Had this been a real avionics bay fire, it wouldn't have seemed prudent after the fact to have waited for my nostrils or eyes to detect particulates. As for actioning the elec fire/smoke items, that would obviously make this situation much more demanding.
Also, a PAR is perfectly prudent had they felt electronic navigation may have become unavailable at some later point.
All that being said, it's possible they did de-power the airplane as directed but the RAT deployed for reasons unknown (lazy relay perhaps?). Who knows at this point.