That's a question that only the cars' computer can answer for sure. Highly unlikely it was any kind of "defect", as OP would have had an SRS fault light on the dash (though given it's a VW, that could have been broken too...LOL). My guess from experience is that it felt that the driver didn't need it, but also sensed that the passenger seatbelt was unbuckled. I'd say that was the key to deployment, an unbuckled belt. If it doesn't have a weight sensor in it (which is possible, I'd have to dig into my database to look) or the algorithm said "Anything under xxlbs in the seat (including zero), deploy the bag", then it would have gone off. I've seen this scenario countless times...bag deployment without a passenger in the seat. And in those cases, we never know exactly why. It's based on data we don't have access to, so we can only guess. If we really want, we can pull data from the airbag control module (ACM), but even that won't say why the bag deployed. It'll only tell me how fast someone was going, if the belt was buckled, steering wheel angle, gas pedal and brake position, yaw, etc...
If you want to insist that for all new cars, the bag won't deploy unless there is 65lbs in the seat, have at it. Don't know what else to tell you except that it's not correct. There may be a federal recommendation to not put kids under 65lbs in the front seat or something like that... I'm not 100% sure of that (it's not something I really need to know for my job). But airbags are far more complex than simply going by one weight number.
OP, they're going to need to open the hood to really see how bad it is. Radiator isn't leaking, which is good. I suspect the radiator support is bent, which is what holds the radiator in. Radiator is probably bent too, even if it's not leaking. Hopefully it's minor enough they can just pull it out and send you on your way. Won't be fully repaired, but enough to be usable. The hood really isn't "repairable" in that it would take more work to make it truly straight than to just replace it. But maybe they'd agree to just bang it out a bit to make it look a bit better.