An Armenian national lives in Germany and holds a permanent residence (Niederlassungserlaubnis). This is a sticker in their Armenian passport. They have applied at the UK embassy in Berlin to get a standard visitor visa, which will likely be granted. The UK embassy kept their passport and said issuing and sticking the visa into the passport will take five days. After those five days, they will be able to reclaim their passport.
(1) Foreigners may only enter or stay in the federal territory if they are in possession of a recognised and valid passport or passport substitute, unless they are exempt from the passport obligation by virtue of a statutory instrument. For the purpose of residence in the federal territory, possession of a substitute identity document shall also suffice in order to meet the passport obligation (Section 48 (2)).
Section 48 says they have to give that document to the German authorities if they need it, i.e. for a control.
Also when asked, the Berlin foreigners office (Auslaenderbehoerde) says as the holder of a residence permit you should carry your passport around at all times.
So within those five days, they have a passport and a valid visa for Germany, but they cannot carry it around with them as it's with the UK embassy.
How do they fulfill the obligation to have their passport with them all the time? Are they breaking the law?