Where I used to live 18 months ago there were a few cases of people leaving a car long-term (5+ days) in the road adjacent to mine. One resident used to be incensed at this and always call the Police after 2-3 days, pretty much demanding it to be removed as, "they do not live round here". We used to tell him the car owners were not committing any offence and could quite legitimately park there for as long as they liked as there were no restrictions. He would get more and more frustrated each time at the injustice of people parking in "our road" and "what do we pay our bloody taxes for if the Police won't do anything about it".
It used to cause him some very unnecessary stress over something he could do nothing about (which was probably what frustrated him so much) and he would not hear it from anyone else that he was stressing over something he had zero control over.
They had no right to demand anything, and you were of course correct - however if my car was stolen and people notified the police that a car that apparently belonged to no one living there was parked there - I for one would be most grateful. Having had a car stolen and it being found about 4 miles away, I was most grateful.