When there are people or vehicles or animals present on a runway, it is common practice to "drag" the runway to alert anyone on the ground to clear the area.
As common as it may be, it is illegal when people are near the runway, unless you consider flying 500 feet over the runway dragging. There are a few accident reports in the NTSB data base where the pilot was suspended for dragging the field when people were near by. I know there is at least one a construction crew working on the airield andanother when a executive jet flew over an airfield at low altitude. I have been repreminded for flying over a building at about 400 feet when turning crosswind too early.
The first low pass was illegal and the air boss should have told the pilot to leave the area when he did this. To be legal you would have to be actualling landing or taking off, not a low pass, not even a clearing pass.
Look this up in the AIM and other FAA documents. A clearing pass is to be made at pattern altitude.