It’s not a matter of being “in on it”, it’s just the reality of a) how policing works and b) California’s decriminalized crime laws.

Arresting a person takes an officer off the streets for several hours, which is a waste of scarce resources if the department knows for a fact that there will be no prosecution and the arrested person will be back on the street with no consequences.

Also, any theft under $950 is a mere misdemeanor - it’s a ticketable offense, with no arrest allowed.