To give an ultra-charitable answer: A government could say "we're giving the option to mint your title as an NFT, and whoever holds the NFT will be treated as the title holder. This probably wouldn't work for titles in any current country for a variety of reasons (liens, taxes, etc) - but you could image doing it on a smaller scale with a less-important asset, like a concert ticket.
That said, I'm not aware of anywhere this is being done.
The problem with that is that possession is not ownership. If your NFT or other asset title is stolen, it still belongs to you, unlike in crypto world. Code is law is fundamentally incompatible with law is law, because a reconciliation process is required for exceptions, and then you’re back to a database instead of rigid enforcement of logic through code and a distributed virtual machine.
Yes but this mimics how real-life possession works, at least for low-value assets. If I go to a pawnshop with a watch, they're going to treat me as the real owner unless they have a reason not to - even if I actually stole the watch.
Your local pawn shop is also aware that possession of stolen property is a crime, and in some jurisdictions, a second degree felony. During every transaction, pawn shops will ask for a government-issued photo ID for recordkeeping purposes for the very reason you mention: the possibility of acting as a mechanism for the fencing/laundering stolen goods. Social media and blockchain make it exceedingly simple for an owner to announce their digital asset was stolen/fraudulently transferred, so ignorance is unable to be used as a defense.
That said, I'm not aware of anywhere this is being done.