The facial recognition isn't on the drone, the cop just uploads the footage to a tagging service *trollface*
The law covers both scenarios, as shown in the linked text: > A law enforcement agency operating a drone under this Act is prohibited from using, during a flight, onboard facial recognition software that works in conjunction with the drone. A law enforcement agency operating a drone under this Act is prohibited from using any information gathered by a drone with any facial recognition software
Grouped as (prohibited from using any information gathered by a drone) (with any facial recognition software), you might be right.
Grouped as (prohibited from using any information gathered by a (drone with any facial recognition software)), I don't think you're right. Personally, I would naturally group the clauses in this way and conclude that off-drone facial recognition was not effectively barred by this statute but onboard facial recognition was.