Without going into any bit of whether the hotel was correct in their assumptions or how they arrived at them (they obviously weren't). I don't think that they have any choice but to call the police directly, w/o consulting with the guest (at least in the US, and I can't imagine the response can be any different in the UK). Human trafficking is an extremely serious thing; once the prospect is raised, there really isn't anything the hotel can do besides call the police, step back, and let them handle it.
Step back and consider the reverse of everything which happened here -- a poster on FT saying that there was a pimp/trafficker running an obvious operation out of the room next door. The poster informed the hotel, which took the step of checking with their guest before contacting the police. The poster would then rightly be upset because the hotel had warned the guilty parties, who were long-gone by the time the police had arrived, thus losing a real chance at stopping one of these things.
That said, given the seriousness and complexity of the situation, an upper-level hotel manager should have been on-site and ready to explain and defuse the situation once the police left. I presume that if that had been the case, we wouldn't be reading about it here. I think that is where the hotel failed the OP.
Just my 2 cents...