The people building this know nobody wants to hand their phone over to the police.
Having your license confiscated when it doubles as your wallet, MFA device for work, and primary communications device sounds like a disaster.
In principle the police Wallet reader could have a function to virtually suspend the license, instead of physically confiscating your phone.
I wonder if they thought of that, and I wonder if police would use the option or confiscate the phone anyway.
The people building this know nobody wants to hand their phone over to the police.