No-one has said the driver was okay to be eating cereal. Clearly, that's not right, however it looked like she was in full control of the vehicle at a very low speed. Contrary to what some would have you think, some people are actually capable of doing more than one thing when driving. I used to use my phone all the time when driving before the law changed, and AFAIK no-one died because of that.
Vigilantism is the bigger worry here in my book. That bloke lost his rag completely, when it wasn't needed. If she'd been doing 50mph and weaving all over the place then sure, his anger would be justified, but pootling along at 2mph? Massive, massive over reaction.