I agree this is probably not extortion, but people step close to this line and have been surprised by prosecution or litigation. e.g. pay for the damages or I'm going to the police...
Even if you somehow agree with this, you must realise it won’t work. Good luck convincing the police, the prosecution or a judge that use of the justice system is extortion ...
We're not talking about use of the justice system-- we're talking about threatened use of the justice system. Which can still be OK, but one has to be very careful. People especially get into trouble using threats of a report to police to attempt to recover stolen property.
Why not threaten? I know where I live there is zero chance police will actually recover the property but I suppose some percent of the time the other person might not know that.