Red flag it. Simple. Every race I have done where there has been an incident where there has been marshalls/medical staff required, has had a red flag. Yellow flags do not mean that everybody suddenly slows down to a crawl. You reduce speed, but you are still mindful that you are in a race situation. You don't overtake, but you are ready to hit the gas as soon as possible. The clerk of the course should have taken action and stopped the race.
It's not the first time there's been a recovery vehicle at the side of the track, moving a crashed car! It was unusual that there were two crashes in exactly the same place, during bad conditions. Maybe a red flag during recovery whilst the conditions were as bad as they were , but not every time there's a recovery in normal conditions. As I said, not everybody crashed at that spot. Some cars were actually going faster and overtaking. The driver and the team bear a certain amount of responsibility
The whole event sums up the definition of an accident, an unforeseen set of circumstances that lead to an event, probably never to happen again. I would say that its not so unusual in bike racing that if one rider falls the odds are the next will be in the same place, mainly as racing drivers/riders all use the same line down to the mm, they often run similar setups and run at similar times, nowadays they have learnt this in bike racing and always place a crash bag in front of the rider for this very reason. Surly this same rule runs in F1, I don't watch too much F1 but do enjoy the odd half hour.. Hope the drivers lives to race again.