Somehow 500m high tsunami destroying "only" 3.5 sq.km. of land doesn't strike me as monstrous. I was thinking it can maybe reach 5-10 km. into the land.
Wavelength vs height; the undersea earthquake tsunami has long wavelength but not a lot of height, but there is more water and force behind it so it's pushed further inland. These ones are like a big splash, high waves but not a lot of horizontal impulse in comparison.
From the article: "Paradoxically, megatsunamis are not necessarily the most destructive, nor are they always synonymous with devastation."
looking at the simulation posted here, it's because the water heigh wasn't so much due to the energy that created the tsnuami but of the geographical configuration. So the nergy dissipated quite quickly and didn't do much damage