What the police would do with this depends on what Matthew says when he reports it. AFS is correct when he says it'd be a public order offence at most. This would be the case if the drivers verbal behaviour made Matthew harassed, alarmed or distressed.
If it was given to me, I'd talk to the driver, and try to educate him, regarding both his driving and his later behaviour. However I wouldn't be anticipating a prosecution as Matthew didn't seem particularly scared when he came over, making no attempt to escape, and was quite happy to discuss the matter. Matthew just did it much more civilly than the driver, for which he should receive credit. I would however feel it was worthwhile to speak to the driver as I don't find his behaviour acceptable, but it would be just that - a word.
These would be my opinions. If Matthew wasn't happy with them I'd run them by a supervisor for a final say.