the process stops and then on my subsequent return I would have to start the process all over again.
That's true. Some EU countries (like UK) allow a "break" in your stay, and some don't.
Now for EU member states citizens there's no such thing as pobyt stały. Now it's called "EU member state citizen card" and it's regulated by some sort of EU directive or regulation - so the procedure is mostly the same in all EU countries.
If they were arrested and had Polish passports their embassies could not help them-so beware!
That's also true. According to polish law: "The Republic of Poland does not recognize foreign citizenship", which means once you have a polish citizenship, you are a polish citizen, and nobody will bother to ask do you have any other citizenship. That's why "your" embassy will not be informed at any time.
To my knowledge there still are some limitations when it comes to purchase of land by foreigners but they all arise form the EU treaty which Poland has signed. It's all there but hopelessly boring, so I wont fill you in on that.