Because the FCC refuses to intervene the firm that installed the transformer will probably continue selling that exact same solution, thus spreading interference all over Chicago.

Found by a radio amateur at the request of local police! It's a clear public safety issue, and clearly illegal. Why didn't the police tell him to turn it off?

Coming from a law enforcement background, my guess is that there is no local statute that deals with it. It's a violation on the federal level, and the feds already declined to address it, so all the local cops can do is ask the business to replace their faulty equipment. Unless they have a local ordinance that specifically addresses the problem, their hands are tied.

Not to be overly cynical but "safety" is the rationalization. They really were hoping to catch a car thief.

They were expecting someone with an illegal jammer, maybe. I'm not sure where you get "car thief" out of that. 911 calls are the reason jammers are illegal, and it was also causing major inconvenience to some drivers with electronic key fobs--either one should be a sufficient nuisance for law enforcement to step in.

My experience is that if you offer to fix it at your own expense, most people will just happily let you.