It doesn't. His post said nobody bothers to enforce it. I'd say what's happened is that some academic did a focus group poll and decided that licencing cyclists was a "good idea", but then the government realised how much money were going to lose on the deal, and so the idea was quietly dropped. The same thing has happened in at least three Australian states and several US states, and probably everywhere else in the world this has been tried.

As someone said above, it's not about competency or recovering stolen bikes (if that ever became something the police might actually pursue), it's about revenue generation and nothing more.