To be fair, being nude in your own home when a passerby can observe you from a public place is indeed indecent exposure - that is why curtains an the like exist afterall. While the facts presented to me indicate the "victim" was on the man's property, from what I can tell, depending upon where the man was standing it would be plainly visible from the walk as well.
Still, this was an utterly pointless case that simply wasted the time of the courts. Unless the court managed to convince a jury that the man exposed himself intentionally (which strikes me as unlikely at 5:30 a.m. - there are better times of day for intentional exposure), I don't really see how a crime was perpetrated. That said, thanks to the puritan heritage of my country, you'll find that "I didn't mean to expose myself" is hardly a defense, and thus the laws in my city that required bathroom windows to be made of frosted glass or have blinds/curtains that keep anyone from seeing inside, even if said room does not face a public street.