After Oliver is arrested for supposedly pick pocketing, he faints when he is sentenced by the magistrate Mr. Fang to three months hard labor. Just then a witness storms the courtroom and says that he saw all and can testify that Oliver is innocent. Oliver, still unconscious, is taken home by Mr. Brownlow and nursed back to health.
The magistrate had no choice but to release Oliver once it was determined through an eye-witness account that Oliver was innocent and had not committed the theft. Oliver was still laboring under the impression that Artful Dodger and the other boys were practicing for some sort of game. So when they actually stole from the man on the street and ran away, Oliver was dumbfounded and couldn't even find it within the powers of his understanding to run also.