As AP if by chance I see someone take money from a guest and pocket it, I'm supposed to open up an internal investigation on it. Most of the time this applies to the check lanes, and more commonly, Starbucks. Since it could just be a tip or someone actually stealing money. Now me personally, if I see it wasn't theft, I act like it never happened. But there are some AP that are sticklers for rules, that can and will pursue it further.
If it happens in the parking lot, I definitely don't care.
As far as the LOD can't demand you hand over the money, that is true. Legally they can't. But Target would be well within their rights to discipline, including up to termination, for failing to follow policy by accepting the tip.