That should have been an automatic instant red flag. Just because it's the last lap shouldn't mean that race control can weasel themselves out of that decision and endanger the driver sitting in the middle of the road. Race Control dropped the ball with that VSC decision. Listen to the onboard audio of RUS, you can hear the panic in his voice: https://dubz.co/c/f82a3d
The cars still all have to travel back to the pit lane for a red flag; they don't just stop where they are in the track. It was the last lap, the only difference between vsc and a red flag is the trip down pit lane.
I'm not really sure if I can convey my thought process in English but I'll try.
The cars still all have to travel back to the pit lane
That is true. However you could see that some cars struggled to clear the stationed Mercedes and had to take to the grass. There was a bunch of debris on either side of the Mercedes.
After a red flag the other drivers could take their time to find the safest way around the Mercedes, or if necessary stop the car entirely. That's not really possible during a VSC because the race is technically still going on. Or to put it another way: during a VSC the drivers only slow down as much as they have to. But they don't want to slow more than necessary. Let's say the driver in front of you has a time penalty that will be applied after the race. During a VSC you'll scramble by the stopped car as fast as possible to not lose more time. It's potentially unsafe.