Yes and the rule was quoted earlier. RP is what I was talking about. How the rule is applies is probably more important. The rule doesn't say "should" or "must"; it says if they do they can't be sanctioned. The Xeno id allows a player the right to do a lot of pretty awful stuff, but you don't see the terrorist i.d. being handed out so freely.
The case you cite reduces what I thought was a pretty reasonable point to absurdity through a ludicrous example that wouldn't happen if the BHer knew what he was doing out in the Omicrons. Of course there is no authority out in the Omicrons. A BHer in Omicron Theta will be there as part of the Guild Core and would probably be interested in one particular type of contraband, i.e. nomad lifeforms and technology.
As it stands, such a strict interpretation of the rules means there's nothing stopping BHers from demanding contraband, "impounding it" and returning it to the local police station, lets say it's on Texas for example and it happens to be cardamine. Which is, effectively, piracy. Now if the LPI says, no it must be destroyed, who are the BHG to go against that?
The chief complaint levelled against the BHG is that it has such a wide zone of influence, an impressive and powerful ship line and a playerbase that believes it is Judge Dredd's more right-wing older brother. If this broad power is used without some understanding of what regulations the local law enforcement has in place, then the BHG can't really consider itself an ally of the House Police. I think the use of the power needs to be restricted in that a BH should have some sort of authorisation from the local police. This is as much for RP purposes as to preserve the need for the police factions to exist.
The point about not having faith in such a corrupt government - well that's based on your belief that the BHG is comprised of people with principles and an advanced sense of morality. This not the Fantastic Four we're talking about; or vigilantes. These are hired killers. They aren't all Dog the Bounty Hunter.
Whose own life is a good example of how real life bounty hunters are subject to different regulations in different jurisdictions. Honestly, look up his life. Quite interetsing in places.