* Was it within the officers duty to go through what he had on paper?
* Suspect went around and about with his seed phrase
* Suspect ran a red light, putting himself in line for an investigation
* Suspect went out of his way to explain what the phrases was for
The suspect may be carrying illegal substances like drugs or firearms for trying to run the red light. So yes, it was within the officer's right to go through the suspect's personal stuff. The suspect made the dumb mistake of carrying the seed phrase around. He's even lucky it was the police that arrested him, he might still have some time to create another wallet and move the funds. But what if they were armed robbers who have ideas about crypto? He probably would lose the funds.