Reading the reports and looking at it logically the Guardsmen did the right thing assuming a couple of things.
The observation post, I would assume is not a heavily sandbagged sangar designed to repel waves of infantry and artillery fire. If it was like the one in the VT it's basically soft cover thus useless as protection. The only sensible reaction would be to give up the position and move to a point giving greater cover.
Presumably their ROE was not to engage anyone unless they presented a direct threat. Plus according to the report they were only five strong in an isolated position at night. They are National Guard not Delta Force after all.
So as far as I can see they did the right thing. They followed their ROE, called for reinforcements and retreated to a more secure location.
Nothing wrong with that.
Incidentally, I have to confess to being involved in an armed border incursion myself, not into the USA though but we invaded the UK. When I was a member of the Irish equivalent of the National Guard. We were patrolling in platoon strength in a forest along the border with Northern Ireland when somehow we crossed over quite a long way. Fortunately the mistake was realised and we withdrew. This was during the troubles and if we had come across British security forces it could have been nasty if they had mistaken us for terrorists or vice versa.
However I do like to think we would have given a good account of ourselves in any firefight. There was a rumour of just such a covered up incident, both sides thinking they were fighting the IRA.
