I'm not a lawyer either but, like you, am very familiar with copyright law. I agree with everything you say except that if he did indeed "touch it up a bit", meaning other than cropping, there could be an issue.

As to the incident itself, it doesn't look like any of the three people involved acted appropriately, but I'd put slightly more blame on the TSO and LEO since their job was to de-escalate the issue and it doesn't look like they succeeded.