Yes, there is supposed to be some movement.

The caliper has one fixed pad and one floating pad. This design requires the entire caliper to float, compensating for wear on the fixed pad. It is on the two socket head screws, one of which you stripped, that the caliper floats.

If you were using a torque wrench, as directed, how were you able to strip the fastener?

The repair is simple. Remove the caliper hanger and repair or replace it as required.

Ciao,
Dick