AF headcannon: The modern incarnation of the tooth farie originates from the early 20th century, however it likely dates all the way back to the Viking era, where children would occasionally leave their teeth in a bowl as a gift to Odin. Some cultures around the world involve burying the milk teeth or even burning them.
Due to these traditions, I propose the idea that when ground up, human teeth act as a form of psychedelic for faries (adult teeth would be a lot more potent, but milk teeth are the easiest to get your hands on. Seriously, try grab one of your teeth with a pair of pliers, that's painful enough, just try actually ripping someone else's teeth out). In an attempt to stop the widespread usage of this drug, the LEP outlawed the collection of human children's teeth, claiming that the teeth were technically property of the children. This re-clasified the "collection" of teeth as an act of thievery.
To get around this little problem, many faries started leaving small gifts or payment as compensation for the teeth. This ment that they were no longer stealing, instead they were trading or purchasing the teeth. Since LEP can't really arrest the children, and for plot reasons, the "collectors" were not technically guilty, so there was nothing they could do.
Until one of the officers on the case came up with the idea of spreading counter stories. "Destroy your milk teeth! Or the witches will use them for evil!"
It was marginally successful, but it was still a lot better than before.
