I’m not a lawyer, but I think the phrase “Lawful contact” that appears in the beginning regarding peace officers has a connotation different from you and me. I believe lawful contact in this context means that there is a probable cause for that contact. For example, if a policeman observes a person doing something in plain sight, whether it’s a robbery, selling drugs, etc, he may act. He may not just walk up to you and frisk you for drugs or other contraband. I think the same still holds in AZ. By this “lawful contact” language, I think it means that the officer must have a lawful reason to ask for your id.