I'm a Waze beta user and Level 5 (out of 6) editor. The caterwauling about Waze letting people track police officers is a container ship-load of false information and hysteria.
Waze is an app that crowdsources the concept of navigation through traffic. App users have the ability to report various things from weather conditions to crashes to traffic jams, and other users will see those reports. If used as a navigation aid, Waze will attempt to route around the types of reports which cause traffic slowdowns.
One of the "hazards" that users can report is police presence on a road. What they can report is just that - the presence of police. The only option is "visible" or "hidden", indicating whether the police presence is overt or not ("hidden" being "hiding behind the billboard" type thing). This does not identify a specific unit, officer, or agency, and does not move with the unit if the unit leaves the area. The report stays active on the Waze map for a period of time (Waze's authors haven't divulged their algorithms in depth). Eventually the report will disappear on its own - but users can prolong or shorten the lifetime of the report, optionally, by either giving the report a "thanks" when it pops up on their screen, or by responding with "not there" (both of those are buttons on the report).
In either the Waze subreddit or the Waze forums - I forget which - the concept of a police officer sitting in Waze and tapping "not there" every time a police report shows up was discussed. The response was that it would just give the report points toward being shortened (i.e. displayed for less overall time), it wouldn't eradicate the report from the screen entirely. And it was also hinted at that if a specific Waze user does nothing but submit "not theres" continuously, Waze may (or may not) have tools in place to automatically recognize this and prevent the user from tainting the data (i.e. ban him).
Various police officers have spoken up when this news item came up in the Waze forums and/or on Reddit. The majority don't mind Waze reporting police presence, because it does the same thing they're trying to do by being on the road - slow people down. It's only the Buford T. Justices of the world that hide in the bushes with a radar gun catching people doing 53 where the speed limit drops from 55 to 35 that are complaining about this.