I've had quick dig through the Police Natonal Legal Database and basically I cannot see a width requirment for the plate so I think Chesterfield is pretty much spot on. You can have a shorter plate if you have less than the standard number of charicters, as long as its still a legal plate IE not home modified.
In general officers will not know the full legal requirement for everything they encounter it would be like trying to learn wikipedia, its just not possible. Traffic officers will have more specific information. In this case the following is relevent:
S432 / Road Vehicles (Display of Registration Marks) Regulations 2001
Summary and Index
2 Registration marks / plates - general interpretation
3 Exempt vehicles
4 Interpretation of regulations 4 -11
5 Fixing of rear reg plates on or after the relevant date
6 Fixing of front reg plates on vehicles registered on or after the relevant date
7 Fixing of reg plates on vehicles registered on or after the relevant date
8 Fixing of reg plates on works trucks, road rollers and agricultural machines
9 Lighting of rear registration plates
10 Specifications for registration plates
11 Further requirements for registration plates
12 Registration marks - interpretation of regulations 12 -15
13 Registration marks - layout
14 Size and spacing of characters
14A Size and spacing of characters - special cases
15 Style of characters
16 International distinguishing signs and other material
18 Savings for vehicles constructed before 1st January 1973
19 Offences
Schedule 2 - requirements for registration plates
Schedule 3 - permitted layouts of registration marks
but this in its self is several pages long, the relevent sections being picked up by Chesterfield. I can post if requried but you'll all be asleep before you get to the end, you can ask to see the guidance that an officer is refering to but unless they have mobile data terminals, you'll be popping along to the closest station to see the info.
In general police are pretty reasonable if your plate can be read and have its picture taken.
The reason they challenge this use is not because they want to target drivers who like a show type plate but because these are exaclty the tactics that drug dealers, human trafficers, terrorist groups and a whole host of other seriously undesirable types use to avoid detection from systems like ANPR. Perhaps this will help some understand the reasons behind police stops or maybe they think that serious criminals should also be let off? Its not about making money from fines its about protecting people.
Sorry I'll get down off my box now