I don't think he knew who we were when he hexed us, but he figured it out after. That's why the hexes went away so suddenly, wasn't it?

And I suppose he might think Draco and Pansy were there, yes, but I never saw their faces. Or Ron's.

Does he even know where Ron lives?

I never got a clear idea of why he let us go but I think the fact that he was remembering what Mr Selwyn said might mean that it was about Arista and Hector.