

Speedometers are not allowed to display a lower speed than the vehicle is running at all under EU regulation - see https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX%3A42004X0331(01)&qid=1752829119241 § 5.3
Displaying a speed slightly higher than actual speed is common and an acceptable margin of safety, such that if you are driving at the speed that the speedometer shows, you are more or less guaranteed to not exceed the speed limit.
There’s no justifiable reason for the driver to still be allowed to drive, the only reasonable consequence for these actions is the permanent loss of their drivers license