Well, there are several other things to note about this video. First, the officer made no attempt to identify any of the group. Didn't ask for ID, names, etc. even though many many many time cops will say it's their 'policy' to ID everyone that they even talk to (which I think is a blatant lie more often than not, could be wrong). Secondly, it appeared to me, though I could be wrong, as though the primary reason he came up was to make contact with the caller(s), as you note that he broke away from conversation to go inside.
The main problem I have with the video is parking his car, lights on, in the road. Maybe there were no spaces available when he pulled up, I don't know, but I don't see how potentially impeding traffic to respond to a non-call, which he knew was a non-call, is a good idea. But, that may be pushing the criticism pretty far.
Another thing to consider is that, while the officer could have potentially responded "better", the OCers could have "responded better" as well. The entire encounter was obviously very consensual on the part of the OCers and in fact, they pretty much initiated and drove the entire conversation and even pulled the officer further into conversation when he started to leave. In some other videos, they even initiate contact with officers who otherwise would have not given them a second look. I understand that it's probably the result of trying to establish a sort of 'working relationship' with as many members of the PD as possible, which is fine. The main thing is that you can't hang encounters on the officers when much of the time the OCers are actually initiating the contacts. Of course, they didn't in this particular case, but again, obviously consensual.
So, really, I don't think the officer pushed any lines...
So yes, could get better, but a big improvement!
On a side note, isn't it amazing that this could happen downtown Austin, and then if you accidentally were to make your way onto the capital grounds you could be arrested for the exact same behavior?