You're missing this:
Effect of Transfer or Nonrenewal
4764. Whenever a vehicle is transferred or not renewed for two renewal periods and the former registered owner or lessee of the vehicle owes a parking penalty for a notice of delinquent parking violation filed with the department pursuant to Section 40220, the department shall notify each jurisdiction of that fact and is not required thereafter to attempt collection of the undeposited parking penalty and administrative fees.

I believe it simply means that if vehicle's ownership is transferred or the vehicle's registration is not renewed for two years, an outstanding parking ticket is returned from collections to the processing agency. If 5 years elapse after the date of the last outstanding parking ticket, then the outstanding parking tickets are no longer valid. However, if the vehicle is registered within those 5 years, the processing agency can go after you.