With regard to the 'chilling effect' and that Harry was harmed by the Police intervention, am I right in recalling that the Police turned up at his work place and insinuated that he would be in trouble with his employers?
It is a very common tactic of police to "inform" employers that an employee has just been arrested. Regardless of whether they are then released without charge or "de-arrested" a second later.
Once again, this sort of stuff has been going on for years. But nobody gave a toss. Or not enough of a toss to do anything about it.
If you raise wolves, you will be eaten. Just a matter of time.