I'm assuming LiDAR is not the only sensor installed in self-driving cars. Isn't that the case? And in this scenario, the software didn't have a lot to process. Road was empty, pedestrian was walking bike in hand perpendicular to road traffic...
Even if the detection box changed in size, it should have detected something. Tall or short, wide or narrow, static or moving... at least it should apply brakes to avoid collision.