A reconstruction of the bomb was key in the court's decision not to bring terror charges against the man, reports broadcaster NRK.
He was found in possession of a bomb-like device, which police later described as containing lighter gas and nails.
The device was destroyed by police experts in a controlled explosion at the scene.
The arrest was given considerable attention in Norwegian media and formed part of the decision by Norway's Police Security Service (PST) to raise Norway's threat alert level from ‘possible' to ‘probable', writes NRK.
After initially being charged using Norway's terror paragraph, a much milder charge, relating to possession of explosive materials, is now being applied in the case.
Doubt relating to the exact nature of the bomb-like home-made device was resolved to some extent by a reconstruction, which also led to the change in the charge against the teenager, according to NRK's report.
“A reconstruction was carried out of what he was presumed to have been carrying. It is the view of the prosecuting authority that this object on its own was not as explosive as [terror] paragraph 142 stipulates,” state prosecutor Marit Bakkevig told NRK.
The device consisted of lighter gas and splinters in the form of pieces of a wire fence, according to the report.
A Russian citizen with heritage in the North Caucasus region, the teenager arrived in Norway in 2010 with his family as an asylum seeker and has a Norwegian residency permit, writes NRK. He has most recently been living in the northern Finnmark County.
He was known to PST before the incident but denies having been in contact with radical Islamist networks, writes NRK.
According to his defence lawyer Javeed Shah, the 17-year-old was “curious” about explosive devices like the one he later made after watching videos on YouTube.
The teenager, who denies the charges, has not offered an explanation as to why he was carrying the device through a busy part of the Norwegian capital on a Saturday evening, according to the NRK report.
“He is very unclear in his explanations in this regard. As previously mentioned, this is a 17-year-old boy who was curious about this and that. With regard to intent it is difficult for him to answer,” Shah told the broadcaster.
The defence lawyer added that his client was relieved not to have been charged under the terror paragraph.
“He is incredibly happy not to have been charged with terror. This is still a very serious charge, so he is tense and nervous, but is looking forward to explaining himself and putting this behind him,” Shah said.
The trial is scheduled to last until October 13th.