Using your analogy, there would soon be no chocolate because everyone stole it.
No, that is not true.
There is a difference between mercy and forgiveness and excusing offenses with no recognition of the violation of trust that was committed. If someone was caught stealing and was not turned in the police but the thief made no effort to make amends for the offense, it would not be unmerciful of the shopkeeper to treat them as unworthy of trusting them in the store. It is not unmerciful to watch for theft and to prevent people from stealing. More to the point, most people will not steal from someone who trusts them, even if they know they can get away with it. Most people have more empathy than that.
Remember that the father of the prodigal son told the elder son, “My son, you are here with me always; everything I have is yours.” (Luke 15:31) The inheritance that the younger son had squandered was gone; his actions had consequences. The father had no intention of replacing the wealth that had been squandered with another inheritance. He was saying he was reconciled with his younger son, not that everything the younger son had done was forgotten in the sense that it was excused with no consequences.
The truth is that a lot of petty theft is not prosecuted even when the thief is identified, it has always been like that, and our economy has not collapsed. The question of whether or not the authorities ought to be called usually depends on whether or not the person responsible for the store believes the thief will (a) be likely to amend their choices if they do not face legal consequences and (b) will pose a significantly greater threat to other possible victims if they are not dealt with by the courts.
St Paul said it is better to suffer injustice than to sue your brother. You have to practice discernment on a case-by-case basis.
Yes. It just depends on the situation.
Sometimes, after all, we have to admit that if we were to have become thieves, the best thing that could happen to us is to have to face the law, so that we would have to confront what we have become, and so amend our lives. In other situations, maybe we would be more likely to amend if our misconduct were taken as evidence of desperation rather than a bad character. It is a matter of “do unto others as you would have them do unto you.”