It is likely though the police is able to respond with something you don't understand a word of :D
"Are able." the police are able to respond. The police officer is.. The police station is... The officer is.... BUT: Police is a plurale tantum, a word with no singular form. https://ell.stackexchange.com/questions/22142/police-are-or-police-is
Although arrest does mean stop, like in the example of "cardiac arrest" or "arrested development", the common usage in English is to "take into custody". If a policeman pulls a driver over, then after talking to him takes him into custody, we would say that first he "stopped" the driver then he "arrested" him. It doesn't appear to work that way in Hebrew. If a שוטר pulled you over while driving, and you said the sentence in this exercise, you would likely be asking him why he was stopping you, not why he was "arresting" you.
So does the word עוצרים change its meaning based on context? How would you know if a person means stop or arrest?
Yes, depends on the context.
הם עוצרים את התרגיל = They are stopping the exercise/drill
They are arresting the thief/burglar = הם עוצרים את הגנב
The pronoun and verb in both can be feminine, I arbitrarily chose the masculine form.
It couldn't always be accompanied by oti, because that would only apply to "me" /oti.
It's been changed apparently. (But for people who are not native English speakers): You can say "Why do you..." in other situations. For instance: Why do you always eat ice cream for breakfast? Why do you drink orange juice while brushing your teeth?
Although there are cases that זַ֫יִן and צָדֵי alternate, this is not the case with these two roots here. Examples are זָעַק and צָעַק, both to shout, עָלַז and עָלַץ, both to rejoice and the roots זער and צער, both to be small, in Modern Hebrew f.e. used in זִעֵר to miniaturize and צָעִיר young.
Do native speakers tend to join words with some loss at the point of merger? The first word sounds like "lamatem" to me
I'm not Israeli, I'm learning Hebrew as well, but Ulpan Noya has a video on this called "are Israelis even speaking Hebrew?" It addresses pronouncing numbers, but she says that it's common in other areas (don't forget to look in the video description for more details about this): https://youtu.be/ts4r7-JpIes
Well yes, when a word begins with the same vowel as the word before it ends, its glottal stop (if pronounced at all anyway) can be overridden and a long vowel is formed. The glottal stop represented by א is mostly used before a stressed syllable (מִקְרָאִי biblical [mikraʔi]), but is elsewhere for most speakers silent.