All the events of "Shaggy Busted" were a result of an elaborate plan to assassinate Scrappy.
First ofo all, let's just get out of the way that there is SOMETHING up. Velma, Shaggy, Fred, and Scooby all immediately grin broadly down at him and don't even seem surprised. Even if they despised him wholeheartedly, a large bird of prey suddenly swooping in and grabbing someone who was right in front of you should have had a larger reactiono...provided they hadn't been expecting it beforehand. So now let's go back to the beginning: first of all, Shaggy seems to be on an abandoned road, yet the police seem to have been tailing him for a while. What business would two cop cars have...unless someone called them in advance. That someone being his friends. Shaggy drives away not because he's "stupid" but because he needs to give the officers every conceivable reason to arrest him. (And being the Loveable Coward he is, you'd expect him to drag out the pulling over so that he could spend as much time away from the mystery as possible. Oh, and speaking of the mystery: Mystery Inc. claims that they were trying to hunt down a slime monster at the old cotton mill: All well and good. But Shaggy has the mystery machine. How did Fred and Velma and Daphne get to the old cotton mill? And why did they need to bring Shaggy along? And how did they even hear of the old cotton mill in the first place? Answer: They didn't. They were never at the old cotton mill. They were safe at home plotting Scrappy-Doo's demise.- In a later episode we see a missing person poster for Scrappy, with "please don't call us". Mystery Inc. cares so little about Scrappy in this world, they aren't even trying to hide that they are unbothered by his "mysterious" disappearance.
This version of Mystery Inc. is the Bizarro Universe to the live-action movie.
Both are parodies of Scooby-Doo released in 2002. Live-Action Scrappy tried to kill the gang and failed. This mystery inc tried to kill Scrappy (and if nothing else, those expressions feel rather off) and succeeded.