the problem with awarding a PK - logical and attractive as it may be - is that it's a clear (and deliberate) error in Law.
So I guess we can understand why NO did what he did : it's the referee's job to apply the Laws as written, not the Law he'd like to have.
[LAWS]21.8 What options the opposing team have at a free kick
(a) Must run from the mark. The opposing team must immediately run towards their own goal line until they are at least 10 metres away from the mark for the free kick, or until they have reached their goal line if that is nearer the mark. If the free kick is in a defending teams in-goal area, the opposing team must immediately run towards their own goal line until they are at least 10 metres away from the mark and not nearer than 5 metres from the goal line.
(b) Must keep running. Even if the free kick is taken and the kicker’s team is playing the ball, opposing players must keep running until they have retired the necessary distance. They must not take part in the game until they have done so.
(c) Kick taken quickly. If the free kick is taken so quickly that opponents have no opportunity to retire, they will not be penalised for this. However, they must continue to retire as described in 21.8(b) above or until a team-mate who was 10 metres from the mark has run in front of them, before they take part in the game.
(d) Interference. The opposing team must not do anything to delay the free kick or obstruct the kicker. They must not intentionally take, throw or kick the ball out of reach of the kicker or the kicker’s team mates.
(e) Charging the free kick. Once they have retired the necessary distance, players of the opposing team may charge and try to prevent the kick being taken. They may charge the free kick as soon as the kicker starts to approach to kick.
(f) Preventing the free kick. If the opposing team charge and prevent the free kick being taken, the kick is disallowed. Play restarts with a scrum at the mark. The opposing team throw in the ball.
(g) Free kick taken in the in-goal. If a free kick has been awarded and the player retires into in-goal to take it and the opponents charge and prevent the kick from being taken, a 5-metre scrum is ordered. The attacking team throws in the ball. If a free kick is taken in the in-goal, an opponent who legitimately plays it there can score a try.
(h) Charged down. If opponents charge down a free kick in the playing area, play continues.
Sanction: Any infringement by the opposing team results in a second free kick, awarded 10 metres in front of the mark for the first kick. This mark must not be within 5 metres of the goal line. Any player may take the kick. If the referee awards a second free kick, the second free kick is not taken before the referee has made the mark indicating the place of the free kick.[/LAWS]
In the original example the offence was not retiring 10m, and the Law could hardly be clearer.