The Commonwealth and ACT ombudsman released a report into the actions of three police officers, criticising the failure to clearly define "racial profiling" following the arrest of the Aboriginal 17-year-old in November 2025.
It found police inappropriately and unlawfully searched the teen, which could have been "potentially lethal".
But the ombudsman did not find evidence that race led to increased, heightened or more extreme uses of force.
ACT Chief Police Officer Scott Lee pointed to this finding, when confirming all the officers remained on active duty while the investigation was ongoing.
He said the officers could face sanctions following the findings, which included additional training.
The police chief accepted trust had been broken between law enforcement and the Indigenous community.
"I apologised at the time of the incident ... and have continued to apologise for the impact on the young person from the mistaken arrest, it's a genuine and it's a sincere apology," he said.
"It is equally important to recognise that our officers can never second-guess themselves when responding to calls from the public about potential acts of violence, and they feel supported by myself and the ACT Policing executive."
On November 11, the teen boarded a bus in the Canberra suburb of Woden and took a seat at the back.
Soon after, three police officers stopped the bus and went aboard with guns drawn.
Once off the bus, the boy was brought to the ground, handcuffed and arrested, before police realised they had made a mistake and that he was not the person they were looking for.
The teenager was released and apologised to, but police still searched him before putting him back on the bus.
"Altogether, the incident lasted just under four minutes. But it, and its aftermath, have had serious repercussions," the report reads.
The AFP said their officers were called to the area following an aggravated burglary at a nearby Westfield shopping centre and a number of attempted carjackings.
Ombudsman Iain Anderson found there was a lack of communication between police officers about who had command, cumulative delays and misinformation, as well as missed opportunities for identification of the actual offender.
"I hold concerns that the AFP had no clearly understood definition of 'racial profiling' and have recommended ACT Policing review its use of race as a proxy to describe a person's physical traits and adopt objective descriptors," he said.
ACT Police Minister Marisa Paterson said she reaffirmed the government's commitment to listening to the Indigenous community and calls by the teen boy's family.
"I would like to put on the record again my very genuine and sincere apologies to the young person involved in this incident, and to their family, and for the impacts on the broader Aboriginal and Torres Strait Islander community in Canberra," she said.
The ombudsman made eight recommendations, with the AFP and ACT Policing accepting five in full and the remaining three in principle.
