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The person is no longer a threat to you.
He's either dead, seriously wounded and no longer attacking in any way, or fleeing the scene.
This is the same drill police use, with the exception that they can shoot you when you're running away under many circumstances whereas a civilian generally cannot. (There are exceptions but in general, running away means you cannot continue to fire).
The reason we use the term "until the threat is neutralized" is because of accuracy. It would be illegal to just "keep shooting until he's dead." under many circumstances. If the defender is capable, chances are "neutralized" means dead or dying. Three-six shots in center mass will kill almost every time. But sometimes, especially if the bad guy is on pcp or something, it may take 10 or more shots to get him to stop charging/shooting/attacking. That's why it's not advised to just shoot X number of times and stop. You shoot until there is no longer an immediate threat to your life or safety.
Hope that clarifies.
-Bill
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