I get the impression they know very little about the law in the UK...either in theory or practice.
Would you care to elaborate if you consider yourself a legal expert? Is display flying exempt from normal legal process? Is there some sort of liability waiver given to display pilots? I don't know - it is a genuine question.
However, I do know that if I kill somebody through a reckless or irresponsible act then I can expect charges of involuntary manslaughter and, if prosecuted, a moderately heavy jail sentence. The AAIB preliminary report states that he commenced the display at 200' rather than 500' which was authorised. Already, that doesn't look too good. There may well be wording in the display authorisation that permitted this under certain circumstances which may emerge later - I hope so for his sake. However, if there are no mitigations then I can't see the police or CPS letting this go lightly, given the severity of the consequences. I would also expect the various insurance companies that are involved will also be taking a close interest.