Olsen later testified that he had no memory of that conversation. So either the other cop is lying, which is extremely hard to believe since he'd have no clear motive for doing so, or Olsen is lying, and he most certainly does have a clear motive for doing so.
My best guess is that Olsen panicked and instead of thinking, he just reacted. He skipped less-than-lethal and went straight to deadly force, and on top of that he gave the order to stop and then fired "about a second" later, by his own testimony. Mr. Hill never even had a chance to comply.
Also, why was Olsen alone? Why didn't he have any backup? This is the sort of situation where, as a former dispatcher, I'd absolutely suggest a backup unit, so I'm curious if that was done. Given what they knew, why didn't they roll a crisis unit (personnel trained to deal with mentally ill people)?
I'm generally pretty sympathetic to the police and try to give them the benefit of the doubt, but... yeah, not in this case. There were so many stupid decisions here, on both a departmental and individual level. Totally avoidable.