From a propaganda viewpoint it was indeed "unfortunate". Some things, however, are more valuable than propaganda. This was a candid video of the IDF at work. Such videos are very rare and this makes them valuable. It is too bad that the IDF officer wasn't filmed giving candy to a Palestinian child, but how many times does that happen.
Justice Ministry: Information examined by AG about Gal Hirsch didn't come from police (Haaretz)
from the article: The quick demise of a perfect PR campaign