The police appear to be treating this as a "my dog ate my homework" - although in this case, the dog does not appear to be an "international driver". They have sent you a stock "my [foreign] dog ate my homework" letter.
The letter in and of itself, and any purported demands within, have no standing in law. In effect it merely restates the original requirement, and offers an opportunity to fill in any gaps.
As a matter of law, subject to any applicable defences, you either complied with the s. 172 requirement or you didn't.
The applicable defences rely on having ticked the relevant boxes, and the court believing you (on the balance of probabilities).
As the person keeping the vehicle you obligation was to provide the driver's details as required by the notice.
Where it starts to make my head hurt, is that you don't seem to believe that the details provided were correct (and you have told the police as much). The police have been "unable to trace him" - which might merely indicate that they send a notice which was ignored, or that they have exercised much diligence and can comprehensively show that nobody of that name has ever lived at that address. The first question becomes whether or not the prosecution can prove that the information you provided was incorrect. The second question is to what standard that can or needs to be proven.
If the court finds that you did not provide the correct driver's details, then the statutory defences come into play. The statutory defences are that you provided all the information that was in your power to give, and which might lead to the driver's identification and that you do not know who was driving and that you could not identify the driver with reasonable diligence (or that it was not reasonably practicable to provide the information).
As regards, providing "any information that is within your power to give...", it would be for the prosecution to prove that you had further relevant information that you failed to provide. Such as have met through Facebook marketplace, and presumably having access to his Facebook username and profile, but failing to provide such information in your s. 172 response.
A court might also find it unusual for two strangers to arrange to meet with a view to one selling a car to the other, without exchanging names and phone numbers. Or notice that disproportionate number of unidentified people caught speeding while test-driving a car that they then decided not to buy.
Fortunately, the police appear to be giving you a second chance to provide the "information within your power to give..."