The police may not touch the phone.
"Despite any other provision of this section, a person who displays or purports to display a digital driver licence is not required to give or hand over, to the person who is requiring the driver licence to be produced or handed over, the mobile phone or other electronic device on which the digital driver licence is displayed or purported to be displayed."
https://legislation.nsw.gov.au/#/view/act/2005/20/part2a/sec...