Continuity mistake: In the 1978 flashback scene, Michael does not have 6 bullet wounds in his chest from when Dr. Loomis shot him moments earlier.
Continuity mistake: After fake Michael jumps from the 5th or 6th floor of the hospital, Tommy and the others just take a few seconds to get to the street.
Continuity mistake: The mental patient jumps from the window facing the ground. When the crowd gathers around him he's face up on the ground.
Continuity mistake: In the flashback to 1978, Lonnie has a pumpkin bag with him, but in the 1978 original, he didn't.
Answer: As you point out, it was a cover-up, probably to protect their reputation and one of their own. They would want to avoid any negative publicity, public outrage, and mistrust. It could also create accusations of police incompetence, leading to a civil lawsuit, firings, internal investigations, etc. There may be other things going on that the police want to avoid being scrutinized too closely.
raywest ★