The pens are unreliable, they detect starch, so they'll only detect really bad counterfeit bills. There are numerous anti-counterfeit features built into real bills that are far more reliable. A cop should have been able to tell on the spot that it wasn't. I wonder if this guy got belligerent or something. Not uncommon for homeless folks and makes more sense than he was actually arrested for having a possibly counterfeit $10 bill.
I used to frequent a krispy creme that routinely checked my $5 bills with those pens that don't work. As a middle aged white guy*, I found it infuriating and complained to the store and wrote an email to krispy kreme. They clearly didn't care and I stopped going. Seriously, who's counterfeiting fives?
For a $10, the most the should have done is not take it, this seems pretty stupid.
*Not really why I found it infuriating, just pointing out that some folks do this for even white dudes with tiny bills. Seriously, a 5?