The vehicles are to be used for "exhibition and educational purposes". Car shows and parades are two good examples of such purposes, but far from an exhaustive list. Not suprising that the prosecutor reads the law too narrow, often they are narrow minded.
I am always amused when folks run lawyers down. It is also funny how folks call a lawyer when the police, a judge, their municipality or neighbor misinterprets or misapplies the law and interferes with their legal rights.
This issue is one of those "you can beat the rap but you can't beat the ride". I am not giving legal advice, but it might be helpful to have a copy of the applicable portion of the vehicle code addressing historic registration, kept in your glove box. If you get stopped and questioned about your vehicle, you can give your license, registration and copy of the law to the cop.
Exhibition use would seem to include pleasure rides, not just shows and parades.
Off roading would seem to be both exhibition and educational use.