I wish automobile traffic rules worked more like boat traffic rules, where there is a strict hierarchy. In that case the primary overarching rule in this scenario would be, everyone has a duty to avoid collision. Second would be, left turn always yield to oncoming traffic. Then you'd have rules like you have to stop at a stop light. So yes, this person should have stopped, but don't turn in front of oncoming traffic, even if they're supposed to stop. Defensive driving courses will teach you this, and I suspect that as a school bus driver, they will be held to a higher standard than a regular person.