Hovering does make people nervous. However, there are legitimate reasons for such a hover. I often shoot spherical panoramas at low altitude, and it requires a full minute hovering in place to complete the process with the M2. Usually the primary subject is not directly below the drone, but may require hovering over a location nearby to get the best view for the spherical panorama subject.
Similarly, police helicopters do not fly directly over their target, but fly in a slow wide orbit around it, which often puts them at low altitude directly over houses on a hillside, for a subject completely on the other side of a nearby freeway, at a much lower elevation, over a high crime area. Annoying, but not much that can be done about it. We both have jobs to do, that occasionally cause annoyance to others that are not the subject.
I try to fly high enough to not attract attention while shooting the panoramas (M2 in a hover is virtually silent at 100 feet), but the yawing of the drone during the panorama should ease concerns about spying on a specific subject. I am also a target for rogue sharpshooters while hovering in place, so I fly away as quickly as possible after completing the process, and generally shoot panoramas at times of day when no one is around. Nude sunbathers are an automatic NFZ with a very wide perimeter! Show respect and follow the Golden Rule.
I know for a fact the person was not shooting a Panoramas as the drone the whole time was stationary and not turning like it would if it was doing a panorama shot. I under stand why police or news helicopters orbit so they do not become a still target, and also provides them a 360 around the point of interest. Oddly enough I guessing the person is relatively close by as yo have point out one would think the signal would degrade enough to cause problem when flying beyond VLOS and close to roof tops.