IMO, given the layout of the breakwater and channel, they made the correct decision to back the stern into the wind. What was lacking was keeping the stern upwind and controlling the headway as the ship came out of the turn, resulting in the bow being much farther downwind than desired and the subsequent challenge in moving the whole ship laterally upwind. Of course, waiting to do the maneuver when further offshore would have afforded even more room.
Most ships, including cruisers, will want to naturally back into the wind with sternway (more precisely, with the pivot point aft, the bow gets pushed downwind, in this case, helping the turn to port). You can see that as they initially approached the breakwater, the thruster was being worked to starboard to keep the swing from starting prematurely. Also most likely was why the tug was kept on the port bow for so long.
If they had decided to turn the bow into the wind, they would’ve had to kill most, if not all, of the sternway before swinging and perhaps even have to give a shot ahead. It would be an “unnatural” and probably more challenging maneuver, requiring more power at the bow to push it into and around the wind. A major portion of shiphandling is using the elements and present movement/momentum to your advantage. Turning the other way would have been the antithesis of that.
Another thing you sometimes see, especially in newer ship/boat handlers is a desire to always be “doing something”. During delicate maneuvers in tight spaces or challenging environmentals, sometimes you need to recognize the requirement to be patient and let the ship do what it’s doing. So long as things are going the right way (even if slowly), that may mean not touching a control or giving a command for an extended period of time. It’s possible the master thought the bow was “taking forever” to come around so he would just help it by starting to drive out of there. Seeing that he was on his first job as master, this may have been an unconscious factor.
Watching the video a few more times, I’m a bit confused as to some of the azipod movements. They’re usually setup to “pull” the ship but the recording layout seems to have that aspect reversed… unless Norwegian Prima is for some reason opposite of convention.
Also, as Ausmariner alluded to, the only way you can get away with even attempting something like this in those conditions is because of the large amount of power that these ships have, especially with the pods and their ability to rotate to any direction. Had this been a conventional ship using assist tugs the outcome would have been much different.
I still think the greater lesson here is the lack of mental picture agreement between the pilot and master. Lack of synergy on that has resulted in incidents even in dead calm waters with perfectly working equipment. The somewhat unconventional relationship that pilots and cruise ship masters have in most ports adds a challenge to that as well. It’s quite different than on cargo ships.
Now this is all my opinion and other pilots/masters can certainly disagree. It’s also really getting into some nitty-gritty shiphandling and judging that from recordings will never reveal the whole story. I also have exactly zero experience in Reykjavík.