All nicely put Steve but before everyone prints off your short version of what's right/wrong in the eyes of the law, isn't it necessary in some States and Provinces to have the delegated authority present when performing your mentioned 'entirely legal' situations and/or have given written notice of what's being done and in some places even receive an Ok to do so first?.
You're right on in the way you view this particular car...this guy'd be best to apply for a state issued Vin and devalued status that goes along w/ it before the car is removed from him and it's too late..
~ Pete