What happened during the scene with the captured German soldier in Saving Private Ryan?

Answer 1

The German machine gunner was made to dig the graves for the dead American and German soldiers. The American sergeant wanted to kill him (which would have been a war crime--killing a prisoner of war), but the Captain convinced him to set the German free.

Answer 2

When the Germans killed the medic, the Americans under Cpt. Miller were angry. They wanted to kill one German POW. Instead, Miller ordered that the POW should dig and cover the graves for all the Americans they killed there. The POW tried to buddy-up to the Americans, trying to save his own bacon. During that, one soldier (a coward) acts as a go-between because he can speak German. When the POW finishes grave duty, most of the squad wants to kill him-- for retribution for killing the medic. But Miller orders the coward to tell the POW to be blindfolded, and walk away. Miller's squad turns on him while the POW walks away, counting off his steps out loud in German.

At the end of the movie, Miller's squad has found Private Patrick J. Ryan with his military "brothers" where they intend to defend a bridge. The coward is tasked with lugging ammo between American lookout points--a job he does poorly, costing the lives of several American soldiers. As he awkwardly attempts to run between sites, Germans come. He slithers down from site. By then, Miller et al are preparing to blow the bridge. As the German group lies there, one--- the former German POW-- shoots and kills Miller. The coward lets it happen. But something turns in him-- he becomes brave. He stands as the Germans start to flee-- the POW recognizes the Coward and starts to try to buddy-up to him again. The coward shoots him dead, the only shot the coward fired in the entire movie. As Miller had done, the coward-now-defender orders the other Germans to run away. He shows compassion, as Miller had shown the original POW who is now dead. The coward's bravery came too late. Miller was dead.