License plate that's reported as stolen + seen by police mounted on the "wrong" car (make/model does not match make/model of car where the plate came from) = stolen car.
They're going to interpret it that way when looking at a car from behind, in traffic, until they can prove it otherwise. They have no idea who the driver or passenger are until they've stopped the car and checked things out.
Felony traffic stops are one of the MOST likely times and places when a police officer will get shot and killed. I'm not surprised at all they came out with guns drawn. It really sucks and I'd be pissed off and indignant if it happened to me, as an ordinary non-felon law abiding driver.