N3on -- who's a streamer/YouTuber popular with the Gen-Z crowd -- was recently featured in a video posted to Kick ... which shows the internet-famous 19-year-old and his entourage getting stopped by deputies in West Hollywood.

Check out the vid ... N3on opens the door and starts shouting questions at the cops about why they're handcuffing his associate -- before officers told them not to move and then commanded him and his friends to put their hands on the headrests in front of them.

A member of N3on's entourage can be heard yelling from outside the car ... a move one of the officers said is "making it worse." It's dramatic -- and we finally got to the bottom of what the hell happened here ... and it's pretty silly, 'cause it basically amounts to a clerical error.

Law enforcement sources tell us ... N3on and his crew were pulled over because their vehicle was apparently reported stolen, which plate-readers in the cop car picked up on and flagged.

We're told Officers ordered N3on out of the car at gunpoint as part of a felony car stop -- standard operating procedure -- and that's when N3on told officers the car had recently been stolen and then recovered by LAPD. In other words, it was jacked and found before they were aware of the update.

Our sources tell us deputies verified N3on's story and found out the car just hadn't been taken out of the system. We're told they explained this to N3on -- who our sources say was understanding -- and released him without further incident.

Video N3on posted seems to confirm this account ... although, we're told officers made clear his security inflamed the sitch by interfering while they were trying to do their jobs. N3on cracked an NSFW joke at the end too -- one we'll let you listen to for yourself.