It is almost inconceivable that in the UK or indeed Europe this scenario would have been played out at the end of a gun.
Ah, yes...the UK, where law enforcement consists of yelling "Halt, or I shall yell 'Halt!' again!"
It would only have taken one trigger happy cop (and there are plenty of those about) for this to have become a tragedy and all because they failed to use their brains and actually make certain that their information was sound. This was after all not some anonymous tip off but a piece of information which could be checked elsewhere very easily (as SoCal said, the FAA database was 100% accurate).
The FAA database was and is irrelevant. Whether the registration information was reissued, the registration mark was still in the system as a stolen aircraft that had been involved in crime. Whether it was a new aircraft bearing an old number, or the old, stolen aircraft still bearing the same number wasn't something that should have been left to chance.
Law enforcement acted correctly in detaining the aircraft and occupants until a determination could positively be made that no crime was in progress, and that the occupants were not guilty of a crime.
No law was broken in this detention, no policy was violated, and all parties acted professionally and in accordance with approved guidelines.