"So if I buy your stolen car without knowing it is actually yours and was stolen, I retain ownership of the car and you have no legal remedy to retrieve it from me."
No, the relevant law doesn't apply to stolen goods. It only applies to goods that were obtained by the seller with the consent of the original owner.
"Where a person having bought or agreed to buy goods obtains with the consent of the seller possession of the goods or the documents of title to the goods, the delivery or transfer by that person or by a mercantile agent acting for him of the goods or documents of title under any sale pledge or other disposition thereof to any person receiving the same in good faith and without notice of any lien or other right of the original seller in respect of the goods shall have the same effect as if the person making the delivery or transfer were a mercantile agent intrusted by the owner with the goods or documents of title."