I think you can stop castigating yourself for your inaction on that day. There are a variety of reasons why you did nothing. Nothing in your life had ever prepared you for such an event. I do try to give a tiny amount of leeway to white people who don’t know what to do in the moment (especially since it was so long ago, and especially when they’re very young). White parents don’t talk to their kids about how to handle racist incidents they might be a part of (but they need to start.)

Could the event have escalated? Absolutely!
Not only that, but if you’d done anything the cop didn’t Ike he could’ve chosen to take it out on your friends.

When my white friends are present for a racist incident that happens to me I tell them they should see to my care first,and not confront a bigot unless they can do so entirely safely for both of us. I don’t speak for all black people when I say this but I tell them their job in that moment is to see if I’m okay, not to tell the person off, or teach them a lesson. I am very capable of speaking up for myself, and I do it well, and if I’m not doing it there’s a reason for that, and they should follow my lead.

You learned and changed. Sometimes that’s all that can happen.