I am wondering if he was waving it around and it had a sensitive trigger. But even the explosion from a blank or paper wadding would require someone to be standing up close, really close. Since two people got hit, it sounds like it might have been a live round.
A few years ago there was a movie with William Hurt being shot about Greg Allman. There was a dream scene where Allman is sleeping in a bed on railroad tracks as a train bears down. The director was denied permission to use the railroad tracks, but ignored that and shot the scene anyway on a bridge, and as you can guess, a real train came along. Everyone cleared the tracks but when the train hit the bed a metal piece flew off and hit a camera assistant in the head and neck and killed her. Senseless.