The good news is that there was no arrest. The law is the law whether or not it is "justified" or constitutional in some people's eyes. Unfortunately, ignorance is no excuse for the law. As far as I am concerned, this should be considered a warning to others. I do not like the law myself, nor do I like that tactics and number generation used by the Administration. This is turning into an unnecessary Cop bashing thread. These men and women are understaffed and underpaid. Not to mention the fact that they are under pressure to produce. They are human beings and put there pants on one leg at a time just like you and I.
Seeing the clip (regardless of whether or not it turned out to be a pen or not) gave the P.O. reasonable suspicion to conduct a lawful search. He reasonably suspected that there was a knife.
Like I said, if you do not like the laws, take some grass root actions to change them. Get involved and vote. Stay out of the City if you so choose. If you have to go there for work, etc, leave the blade at home, or carry something that is legal to carry.