whoateallthepies,
I think you are jumping to one or two unwarranted conclusions about Rule 17 of the Rules of the Air.
The exemptions for police ops are to allow a police aircraft to formate on another aircraft for police purposes, such as obtaining the aircraft registration for some reason. As with so many things about police ops, the exemption is found in the law, and the restrictions under which police pilots can use the exemption are in the PAOM (CAP 612). They don't amount to a general exemption from the Rules of the Air for police ops. If you think about it, it would be crazy to have any class of aircraft exempt from the Rules of the Air.
..... Which does not mean that when we are on task OCAS we wouldn't like you to choose to give us a wide berth, if you can. In a rather similar way to how most pilots would react to, for example, aircraft doing aerial photography.