IMHO, such encounters highlight the observation that people are unpredictable and potentially dangerous. Such encounters have, as a friend put it, 'a whole lot of ways they can go south'.

Odds are both you, and he, were scared. He has no idea how you would react and if you were armed. Begging for money and offering shoes is an act of desperation. People without resources to fall back on, probably nursing one or more addictions, are always just a few steps from the edge.

Being afraid likely made him more aggressive than he might have been. Fear makes people want approach situations quickly, to get it over with and to limit the other sides chances of being prepared. A lot of people would throw money at the situation to both relive their guilt and end an uncomfortable encounter. This reinforces the use of the tactic to beg aggressively and to imply a threat, Even when they have no intent of using violence.

Even without conscious intent it has to be noted that many street people are armed in some way. Arming themselves is a way of leveling the field, protecting what little remaining dignity they have left, and protecting the few resources remaining. Homeless people are prey to every street tough and bully there is. Physical, mental, emotional and sexual abuse are common. Many, if not most homeless people arm themselves. Knives, sticks, lighter fluid/Lysol and a lighter (poor man's flamethrower), hot sauce (poor man's mace) and guns, if they can manage to get them, are common. A broken bottle or artfully folded can work as rough knife.

Desperate, hurting (you don't beg unless your in some sort of pain. Mental or physical.), with a history of getting hurt and society not protecting him (lots of street people have histories of abuse and abandonment), feeling like everyone is against him, and with nothing to lose he could easily panic. Add a little western macho posturing (it is better to go out in a blaze of glory, a bang, than a whimper), some moral leveling ( I'll show them they can't step on me and get away with it) and you are looking at an emotional powder keg waiting for a match. Odds are if/when he goes off people get hurt.

Funny thing is that on their own, and not under threat, street people are not naturally violent. Mostly they play the victim. "Rolling drunks" and "bum fights" is a sport imposed on the homeless culture from outside. When they do get violent it is usually a result of pent up rage, disorientation from drugs and mental illness, or fear. If you had been armed and reached for a weapon there is little doubt he would have reacted adversely. What form that takes is anyone's guess.

As it is everyone walked away healthy. That is a win in my book. No worries that you didn't call the cops. IMO it would have been something of a service if you had but it is always a judgment call. One highly contingent, on a lot of other factors.

In some areas calling the police is a way to make your life more miserable. Snitches gets you more abuse. Also cops don't always assume the person who calls is innocent. Hassling people who call is a nice way to keep the work load low and enforce economic and racial boundaries by letting people know which side they are on. It happens a lot in some areas.