I'm not a lawyer but I have had plenty of experience over the years dealing with recalls. The manufacturer can issue a stop sale order to dealers, basically forbidding them from selling or delivering vehicles until the recall work has been performed. However, I have never seen a case where they attempted to force customers to stop using their vehicles by impounding them if they happen to be in for other service work. Basic common sense says they have no such right, and if they did what would keep them from showing up at your home and hauling your vehicle away if you didn't voluntarily bring it in for a recall? I call BS on what this guy told you, and if in fact a manager at H-D told the dealers this then that guy is FOS and overstepping his authority.
Now, if the problem is so widespread and serious, why do you suppose Harley is dragging it's feet in announcing this recall to the public? If it was so serious they think they can give themselves the right to impound your vehicle without your permission, I would think they would have placed ads in every form of media to alert their customers.

Jerry