This in actual police car in active service. The video was recorded a long time ago (as you can tell from the quality). The decomissioned Polonezes had their "POLICJA" sign on doors removed and it was illegal to put it on again. Also, before these cars were decomissioned in 2009, they were never sold to private owners, as the police service teams were repairing and renovating the police cars to return them to active service as long as it was possible, so before 2009 no Polonez left police force, unless it taken a bodyshell damage in accident, that was too extensive to be repaired.
The retired police cars had their "POLICJA" sign removed. They would have been arrested if this car was spotted anywhere in traffic with "POLICJA" sign on it, if it was a privately owned retired police car. Also judging from quality of the video, it is a recording from a very old cell phone.
Not out of service. Judging from video quality, it is a very old vid, made long before the smartphones era. Those cars were not decomissioned before mid 2009, and before that, old police cars in Poland were never sold. There were either renovated by the police repair teams or scrapped when bodyshell damage was too extensive to repair.