No, he was telling them to arrest him sarcastically because if the knife was a weapon, he was also in possession of a crowbar, which as he said is a lot heavier and more dangerous than that knife. So if they were going to arrest him, just to do it. He knew he didn't really do anything wrong and was basically trying to be an asshole towards them.
I think they were in the wrong. He did take some of his comments a bit out of hand but most were pretty funny, such as "why don't you just take me to your desk so you can spank me." I don't think this would fly very well in America though. Cops would have probably flipped when he started saying things.
And this is just my understanding of the situation. I may have missed something he said though.