What's "not quite right" is that it is complete legal nonsense, and the force's solicitor is pig ignorant!
Title to stolen property is never lost. The police are perfectly entitled to, and should seize it, title being established. The police have a duty to prevent crime and take property which has been stolen. It doesn't matter that the current possessor didn't steal it or they bought it in good faith; somebody stole it and that is all that matters. It is only a civil matter if the present possessors of it wish to sue the person from whom they bought it, for selling something without title.
It is not a matter of human rights. No human right exists to protect those who benefit from a crime, or those who are subsequent beneficiaries.