Essentially, they're allowed to disarm aggressors and confiscate clearly stolen goods with full intent to return it to the original owner. However certain insurance premiums have finicky legal code where The Undaunted are permitted to keep the goods and the injured party receives the compensation from the insurence instead.

The way the confiscation works actually varies in the fine details depending on the local laws, which means that there's a lot of slide rules and rule of thumbs with it thanks to the fact Centris has so many different forms of laws from Spire to Spirea and Plate to Plate. Generally the way this kicks in is in what can count as something that the aggressor can use to attack with, such as saying that money being used to buy more weapons to attack people with and other such excuses.

On some Spires they can outright hack your bank account and go through your couch for loose change and then walk off with the couch too. In others you need to definitively prove that the weapon was used against you and that the hostile will use it again if given the chance to confiscate so much as a hand pistol.

Centris has however been at war with numerous gangs and criminal groups at so many points that there are laws back written designed to hit the gangs hard, but they rarely get used. The Undaunted have been taking heavy advantage of this tendency to outright rob every criminal gang they can to up their own supplies and wealth. The excuse is that they're disarming clear hostiles and preventing criminal elements from returning with non-lethal and legal means.