Right, it's NOT a law. Agencies can choose to ignore it.
However, the source of the information is CA DOJ CLETS. DOJ says they will disconnect the agency from the CLETS network if they do not comply with the security requirements. Agencies are welcome to get that service from someone else if they don't like it. Oh, that's right, they can't.
(I have NO idea if DOJ has done this or not. Their document stated that it would happen if agencies didn't comply with the agreement they signed originally.)
So, officer does a stop. They can't run the plate, so they have no idea what they are dealing with. I guess dispatch could always pay the $3.95 and pay someone else for the info. And we know they'll not let anyone else manipulate that info, and it will always be admissible in court because it's a reputable source on the internet and they paid $3.95 for it. Car might be stolen, might not. Driver maybe found someone that was willing to scrub all their info out of the internet database.
Officer asks for drivers license, but they can't run it. They don't know if you are Mr. Nice guy heading to church on Sunday morning and then on to read to elderly people at the rest home, or if you are a wanted felon. But, that's OK, the officers are willing to take that risk. And the general public is totally OK with letting the wanted felon walk because the agency didn't want to meet the requirements that they originally agreed to years ago.
That'll teach them!