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Only thing I would have changed was the wording when you spoke to him. Instead of "i'll shoot you in the middle of your face" I would most likely have said something more like "I would recommend you let go of the basket and walk away" If that didn't resolve the situation than I would likely have escalated the phrase to "again, I would walk away while you still can" Had the guy made any advancement after the first challenge he would have had a life changing experience courtesy of Heckler and Koch.

Just my meager opinion, take it with a grain of salt.