The scenario of an off duty officer in a store with their child while the store is being robbed is a familiar one in video training for police officers. With the officer having no backup, no communications, no soft body armor, and possibly limited ammunition, the standard recommendation is for the officer to do nothing so that they don't jeopardize their, or their child's life. Acting before shots were fired could also cause a shooting that may not have occurred had the officer not taken action.
When Commissioner Reagan is told of Sergeant Reed's actions at the bodega, he tells his assistants to summon "Officer Reed" to his office. The commissioner knows the difference between an officer and a sergeant. He wouldn't make a mistake like that.