It's a tricky one...I saw the shot in the Daily Fail and was chatting to our desk manager who's at Celtic Manor this week...we were saying that actually I'd have originally gone for exactly the same position (as would all of our guys). However, if the player or their caddy is unsure, they'll ask you to move back a bit.
Darren Clarke did it to me this year on the 14th back in June...he had a hellish lie and just said "i'm not too sure about how I'm going to strike this, if I shank it, it's going straight for you...your call if you want to risk it!" I took his advice and stepped back by about 2 feet. Worked fine, and he holed it from the deep rough.
We always get too close and then work our way back...caddies are very helpful in these situations.