In terms of the danger of this kind of image confabulation, it seems similar to the block-based compression on Xerox photocopiers which sometimes changed numbers in scanned documents: http://www.dkriesel.com/en/blog/2013/0802_xerox-workcentres_...
It would be absolutely wrong use, as it substitutes some information that the software has learned before and combined instead of the non-existing one in the original pixels.
If the software was trained with the picture of the innocent person, it would produce it instead of the picture of the really guilty person. It can only guess and only guess based on with what it was trained with.
Maybe there could be a moral obligation for the designers of the training set: trained with the right data, if you say "enhance" once too often the model might overfit into a scene from Star Trek ("after shooting, video footage shows man in command uniform firing at random redshirts, people in medical uniforms miraculously unharmed").