In the ad, an Australian cricket fan finds himself in the middle of a group of celebrating West Indian fans. To soothe this "awkward situation," he passes out fried chicken from KFC.
Fried chicken is stereotypically associated with African Americans, which is the main reason people found the ad offensive. But many Australians (as well as Europeans) responded by basically saying, "Get over yourselves. The U.S. is not the center of the universe, and we weren't even thinking about your stupid American stereotypes."
Personally, I think it might be worthwhile to consider the possibility that KFC's Australian ad guys did not choose fried chicken because of racist associations so much as because of the fact that KFC's main product is -- surprise! -- fried chicken.
I can see some touchiness around the "awkward" part. It depends on how you read the ad. Is the situation "awkward" because the white guy is surrounded by black fans who are "unruly and uncivilized and so rowdy," as one critic put it? Maybe, but what kind of nutcase thinks drumming and dancing is too "rowdy" for a sporting event?
My reading is, sure, the guy might feel a bit "awkward" being the only white guy around, but the bigger issue is the fact that his clothing screams out "Hey everybody! I'm a fan of the rival team!" So he makes friends by offering everyone free food. Maybe the guy's a horrible racist, too, but it's hard to get a sense of that one way or the other based on the two phrases he speaks during the 20-second ad.