You are correct that they were testing the system, so they probably waited too long to react. But Tesla’s car didn’t do well in this incident

A competent human driver would instinctively slow down, look at the potential obstruction, and think about changing lanes or an emergency stop.

Most probably, the visible object is just some water spilled on the road or that kind of thing. But if it isn’t then it’s very dangerous

This car appeared to be blind to any risk. That’s not acceptable

Heh, just yesterday I drove past some roadkill and wondered what a self-driving car would make of that. Then I started wondering how it would handle deer crossing the road 50 years ahead, or running alongside the vehicle as they sometimes do when they get spooked. Or how it would handle the way people drive down the center of gravel roads until they meet someone, and then move over.

At 56, I don't expect to see it on country roads in my lifetime, but maybe someday they'll get there.

> They were testing FSD

So if that was a human and they ran them over it'd be okay because they were testing FSD?

They're putting themselves (fine) and everyone around them (far less fine) in danger with this stunt.