According to the report, it seems the policeman considered the wrapped arm to be an impediment to driving properly. There is no statement from the ticketing officer nor from the Spokesperson of the Police, but the lawyer, who literally wrote the book on traffic law, according to the report, surmises that to be the problem. 

If the fellow were laying/wrapping the tefilln while driving, I could understand the problem. Like applying makeup while driving, like shaving while driving. Like talking on a phone while driving. Just wearing the already wrapped tefillin? I dont see a problem and dont see how that is different than wearing anything else, even something unusual like a costume on Purim. As long as his movement is not restricted by it in any significant matter I do not see why wearing tefillin should be a poblem.

That being said, from a halachic perspectivee I am not sure driving while wearing tefillin is appropriate. When one is wearing tefillin one is meant to be focused on the tefillin. Being involved in anything that is distracting should not be done or is a reason to remove the tefillin. When one is driving one must pay attention to the road, not focus on the tefillin. This, in my opinion, is the ultimate "hesech hadaas" of the tefillin. I see people driving while wrapped not too infrequently, but in my opinion it is not appropriate.

this brings new meaning to the DUI - Driving Under the Influence