Reverse the situation, the dog would definitely be dead and the owner charged with assault on a police officer if not shot.

Saying "You're fine, you're fine" while just watching her be mauled and even restraining her from defending herself is in no way acceptable. They need to suspend their k9 unit immediately, it's not safe or under control.

Well, at least we know the dogs are as well trained as the rest of the police.

(I wish I could click the sarcasm button in good faith here.)

Did we watch the same video?

The officer's weren't 'just watching her get mauled and restraining her from defending herself', two of the officers were trying to pull her away from the dog and the third officer was trying to pull the dog off. If I was unlucky enough to get bitten, I'm not sure what more I'd want to officers to do. About the only faster way out is shooting the dog which is admittedly risky when it's still chewing on your arm.

What? Apparently we didn't watch the same thing.

They had both her arms, tight, and the third one seemed to be reasoning with the dog, while telling her "your fine" as she's held tight and repeatedly bitten. They didn't ever try to pull her away either, they held her still (probably hoping that would calm the dog enough to stop mauling her).
If it was biting one of them, they would punch, kick, taze, pepper spray, and shoot that dog. No question in my mind, I've seen dozens of instances where they did just that for far smaller, non threatening dogs.
I sure as hell wouldn't want them to hold me down where I couldn't defend myself at all while they let the dog continue to bite....that's how they did it in the 60's, and it's still not ok.

I think the reason they were telling her she was fine was to calm her down, because the more she reacted, the more aggressive the dog would be.

I think so too, but they should have said that instead of their normal MO, lying.
It's probably why they held her too, the dog is trained to hold until the suspect is in custody....or until the instant he's given the release command.
Again, they should have said so instead of the normal 'take complete control without explanation', imo.
That he kept biting means he or his handler is not properly trained and to me it's reasonable to think the program should be suspended pending retraining of the entire k9 unit, because clearly they can't properly control their dogs, and that's a deadly hazard they're now aware of.

I would hazard a guess that they normally allow the dog to chew their suspect a bit, so it was confused.