Sprinkler heads on fire suppression systems go off locally - if there's a fire, then only the sprinkler heads in the vicinity will go off. The alternative is to let the fire spread and destroy the entire facility.

But in addition, this particular story takes place in a skyscraper in Manhattan, with the data center in question occupying a portion of one floor, with office space surrounding it. So letting a fire burn would create significant risk to human life as well.

Often only one sprinkler head would discharge, so the damage might be localized within that ~12' radius to some degree. It's not a deluge system like many movies make out sprinkler systems to be where every head discharges simultaneously.

I heard of an inert gas fire fighting equipment discharging without a fire in a data center. The pressure wave created by the initial discharge ruined all the hard disks and caused replacement of all the equipment even though there was no fire (or water) as the conditions meant no more warranty

The DC in question was in the middle of a 33+ story office building, so the the worst case is "entire building catches fire and people die", not "equipment destroyed".