Definitely driving around in an unregistered and uninsured vehicle.

In Florida, it would get towed, and you'd get several court notices to appear. Tow yard requires current registration and insurance before they release the vehicle back to the owner.

This is Texas. How did this thread devolve into lesser states' practices?

It looks distinctive enough to attract attention on its own. If nothing else, it'll be an added ticket if he has any other interaction of the Smokey kind.