City-safe (city safety really) is a system that automatically applies the brakes when it detects another vehicle within 6 meters of the front of the car with which a collision is imminent. It's designed for stop-n-go city traffic to avoid or at least reduce the severity of the relatively common low speed rear end accidents.
It has nothing to do with parking so avoiding pedestrians in that context is irrelevant.
The driver is a dumbass.
Volvo has a "automatically brake when a pedestrian collision is predicted" feature which costs a bunch of money and hence "not plowing through human beings" is an optional extra just like it is in almost every other car ever made. Of course it isn't even optional in most cars - though I'm sure you could retrofit the LIDAR and computer and so on.
Self parking is irrelevant, since that was not being used in the case in question.