Essentially, the (single) guy who he was convicted with (who he didn't know), was also exonerated. He was given the choice to be let out immediately and keep the conviction, or stay in jail and fight the conviction. That guy fought, and won millions in a civil hearing. Cooper had a wife and kids, so after spending almost 20 years in prison, he wanted out immediately, so he took the conviction, stating that his family had been homeless on occasion, and he wanted out immediately to help out. Pence is denying the pardon, because he hasn't exhausted all his legal remedies. Apparently he wants him to go back to court.
You have answered your own question. I do not understand what you are puzzled about.
What bothers me is, how can a judge make such a deal? How could anyone, but especially a judge? How can such a deal be accepted by everyone? How can it be enforced? Seems to me that has to be a civil rights violation.