That example was addressing whether it's legal/forgivable to drive without a physical license in your possession in the US. In my experience, it is, and also there's not an issue with insurance because you are legally licensed to drive.
As for the example of the fraudulent license holder, yes, the officer would probably be able to tell, which is what I've been saying this whole time - one would not want to present the old or the new license to the police.
Sure, an illegal license holder presumably either doesn't care or isn't prepared to deal with an auto accident, in which they would have to pretend to be the person on the license and it would go on that other person's record.
If he looks it up in his computer, wouldn't it show the wrong photo ?
Also, if you don't have a valid license your insurance may not pay out in case you are in an accident.