More protests, and the group now has a name: "The Urewera 17." The Maori Party have called on New Zealand Iwi to demonstrate their displeasure to the Government, and are framing the arrests/raids as State-sponsored racism.
One of the key tactics for a State engaging a 4GW opponent is de-escalation. Given that 4GW is won and lost at the moral level, any actions that could be viewed as heavy-handed (while they may gain you victories at the tactical/physical level) only do damage to the State's moral standing and generate more 4GW enemies to fight.
Raids by heavily armed forces against rural/residential areas with no obvious military significance always serve the 4GW opponent, not the State. Images of a distraught grandmother who was 'forced' to submit to being photographed and her car searched, or stories of school buses filled with children being held up by officers in riot gear, is significantly damaging to the State.
If you're going to go in hard, you need to be seen by the public as having a moral imperative. Without convictions of most/all of the Urewera 17, specifically for terrorism-related offences, the State will lose credibility.
A more measured approach would have been to engage with the local community instead of alienating them (police liaising with, or at least informing, local leaders before raiding the camp). The State sacrifices potential short term gains (high-profile arrests in this case, and the end of somewhat nebulous "imminent" threat) for community cooperation that will de-escalate the situation in the long-term.