I wanted to know the meaning of this hadith

Sahih al-Bukhari, Vol. 2, Book of Tax (Zakat), Hadith 556
Narrated Sad (bin Abi Waqqas) :

Allah's Apostle distributed something (from the resources of Zakat) amongst a group of people while I was sitting amongst them, but he left a man whom I considered the best of the lot. So, I went up to Allah's Apostle and asked him secretly, "Why have you left that person? By Allah! I consider him a believer." The Prophet ﷺ said, "Or merely a Muslim (Who surrender to Allah)." I remained quiet for a while but could not help repeating my question because of what I knew about him. I said, "O Allah's Apostle! Why have you left that person? By Allah! I consider him a believer. " The Prophet ﷺ said, "Or merely a Muslim." I remained quiet for a while but could not help repeating my question because of what I knew about him. I said, "O Allah's Apostle! Why have you left that person? By Allah! I consider him a believer." The Prophet ﷺ said, "Or merely a Muslim." Then Allah's Apostle ﷺ said, "I give to a person while another is dearer to me, for fear that he may be thrown in the Hell-fire on his face (by renegating from Islam)."

Does this Hadith justify the notion that we should not give zakat to some Muslims? I didn't understand why the prophet didn't give the man zakat

by

What can be understood with the above text is that Prophet Muhammad (saww) used his knowledge of unseen about that individual like Prophet Khizr (a.s) acted upon his knowledge of unseen in the story of Prophet Musa (as).
But as long as we ordinary human being we do not have divine knowledge therefore we cannot act in that way as Holy Prophet (saww) acted as we don't have that type of knowledge.
Furthermore, it us not correct to decide Fiqh rulings merely based on 1 Hadith. To decide about Fiqh issues we need to have many knowledge of different islamic dimensions for example Quranic sciences, ilmul Hadith, ilmur rijal (genealogy of the narrator of hadith) correct Arabic grammar ( Nahv and Serf) Logic and Usool al Fiqh etc.. And for all these we need to spend 10-20 years in any Islamic seminary to acquire prerequisites of Ijtihad.
But as Jurist says we can give Zakat as follows:
* Zakat can be distributed in eight ways:

1. It can be given to a poor person (faqīr). A poor person is defined as someone who does not possess the means to meet his and his family’s expenses for one year. Therefore, someone who has a trade, or property, or capital by means of which he can meet these expenses for a year, is not a poor person.
2. It can be given to a needy person (miskīn). A needy person is defined as someone whose living conditions are worse than that of a poor person.
3. It can be given to a person who has been appointed by the Imam (ʿA) or his representative (nāʾib) to collect and safeguard zakat, maintain its accounts, and deliver it to the Imam (ʿA), his representative, or to the poor (fuqarāʾ).
4. It can be given to disbelievers (kuffār) who will be inclined to the religion of Islam if zakat is given to them, or who will assist Muslims in battle or in some other matter. Zakat can also be given to Muslims whose faith in some of the noble Messenger’s (Ṣ) teachings is weak but which will be strengthened as a result of giving zakat to them. Furthermore, zakat can be given to a Muslim who does not believe in the vicegerency (wilāyah) of the Commander of the Faithful [Imam ʿAlī] (ʿA) but who will be inclined to believe in it if zakat is given to him.
5.It can be given to a person who is in debt but is unable to repay his debt.
6.In the way of Allah (fī sabīl allāh), i.e. acts that benefit the general Muslim public, such as building mosques and religious schools, keeping the town clean, tarmacking and expanding roads, and suchlike.
7.It can be given to a stranded traveller (ibn al-sabīl).