https://i.imgur.com/Hj6glgu.png
The car made a plan to cut across the yellows and then continue straight down the opposing lane. It shouldn't do that whether or not it sees traffic up ahead.
Here's the screen grab of when it decides to cut across the yellows (see the path plotted). The car is clearly visible in the oncoming lane with headlights on. There's also another car closer in the farther left lane. Neither of them is detected in the visualization. This is where a system with more robust sensors would detect objects way earlier and would never decide to cross lanes, whether it's double yellow or not.
Here's after it has crossed the yellow lines. The car is again clearly visible, but no detection yet. Clear perception failure.
Really, the key here is that it's on-screen model shows the yellow lines. It must have become terminally confused to plot that course. Looks like it threw away the model and the rules and just decided to end it all.
Headline: "Tesla computer, in fit of depression, commits murder/suicide". (With a number of !s appropriate to the publishing venue.)
What's the name for the slash marks sometimes found on suicide victims, where they tried to cut their own throat or wrists several times before they succeed? Hesitation marks? Maybe that's what we're seeing here. /facetious
On the plus side, the computer did say "I'm sorry" after almost killing the driver. So I guess that's something.