I think it was some really bad AI.
It doesn't matter that he didn't know how his friend was killed or where the killer was. He stood there and didn't even react to it. He didn't look around quickly, he didn't run away. He just stood there motionless until it was his turn.
Dumb AI will be in this game; there simply is no way it couldn't be.
Very rarely do people spring to action when they witness someone else die from a non-explosive projectile. Many people absolutely freeze up when that happens. I'd like to see, however, maybe the AI crouching down to inspect the dead (if hit with an arrow).
Which brings me to my next point, if an NPC is hit from a distance with a ranged weapon, their compatriots should have a different response than if they are just generally attacked. Sneak or no sneak, if my friend gets shot by an arrow, I might freeze up, I might look down to check him out, or I might hurriedly look around, but after all of these I will certainly quickly get behind cover. And if I were more experienced and battle tested, then I wouldn't freeze up, I wouldn't look around, I wouldn't check him out, I would just find cover to the direction opposite of the penetration point of the arrow (if I witnessed the arrow striking him).
I think Todd's character being 100 sneak factors into it, but more importantly I'm hoping that it being a low level bandit also contributed to the situation.