In this construction, the conditional is probably expressing something about the person's character. It ventures an opinion about the ability to predict their behaviour.
I can't believe that, given who Andy is and what he knows, he would act the way he did in such a situation.
Your version is absolutely correct as well and expresses doubt about the reality of the action.
That's in theory. In practice, we rarely worry about the precise implications of the realis/irrealis signifiers. The simple past could be used to express an opinion on character ("I can't believe he did that" even when you are perfectly convinced that he did), and the conditional can be used when you're in doubt about the reality.
Actually, the combination of the conditional and the past perfect in this case expresses that fuzziness pretty well. The tense doesn't make much literal sense since the past could only be used from the present perspective on the action, which is real, but the conditional suggests that it's hypothetical.
In any case, to restate, the intended effect is probably to question your assumptions about the person's character.