Cambridge University graduates Jack Merritt, 25, and Saskia Jones, 23, were killed by convicted terrorist Khan, from Stafford, at a prisoner rehabilitation conference near London Bridge on November 29 2019.
Barrister Catherine Jaquiss, who shared a table with Khan at the Learning Together anniversary event, said he had described how he had been going down the wrong path in life but had changed his ways.
Khan was released from prison on licence in December 2018, halfway through a 16-year prison sentence, after he was convicted of terror offences in February 2012.
The 28-year-old, originally from Stoke, was living at flats on Wolverhampton Road, Stafford, before the attack.
Ms Jaquiss told jurors at the inquests into Mr Merritt and Miss Jones’s deaths, at Guildhall in the City of London on Tuesday, that she had invited Khan to come and sit at a table to take part in a group discussion during a workshop.
Asked how he seemed, she said: “Perhaps a little shy. I didn’t notice anything out of the ordinary at all at the time.
“I remember him saying something to the effect of he had been involved with a group of people who had been leading him down the wrong path.
“He had now seen that way was wrong and he was now essentially turning the other way or going a different way.”
A statement from Millicent Grant, a legal executive who sat at a nearby table, said: “He wasn’t animated, he was sat back in his chair, straight faced and with a clear, steady voice.”
Khan was wearing a padded jacket at the conference, and jurors heard a statement from Cambridge PhD student Benjamin Jarman, who had planned to ask him if he was warm.
In his evidence, read by counsel to the inquest Aaron Moss, Mr Jarman said: “He was looking anxious… I was going to ask him where he was from and mention he must have been warm in his coat.”
It was later discovered that Khan was wearing a fake suicide vest.
Ms Jaquiss said that after a refreshment break at the end of the workshop, she heard screaming and grunting coming from downstairs in the building.
The barrister, who knew Mr Merritt from her previous involvement with Learning Together, told the jury a man came into the room “who said there is a man downstairs with knives and a bomb strapped to him”.
“I was certainly very scared and I suppose frozen to the spot a little bit, not knowing what to do.”
Khan, who was armed with two knives and wore a fake suicide vest, was tackled by members of the public with a decorative pike, narwhal tusk and fire extinguisher, and was then shot dead by police on London Bridge.
Earlier, jurors were shown graphic footage of Khan lying on London Bridge after he had been shot for the first time.