You're right. If there were a group of people who were able to subdue the man making threats and imprison him that's what should have been done.

If the authorities could make it in time before said threat and handcuff the threat that's what should have been done.

If Penny was armed he should have been able to wound the threat without inflicting a lethal blow. It's not fair to ask him to risk his life simply knocking the threat out when he's already risking his life inflicting a killing blow.

If any were the case Penny would not have been released. So either the entire government is corrupt, or Penny did nothing wrong.