You must be kidding. The 'location' of the drugs makes no difference in the courtroom.
If you watch the video, you clearly see the cop holding the bag up in front of the other officer and perp, making sure they see it and see him place it in the billfold.
If you are going to do something illegal (plant evidence), do you hold it up in front of the accused and explain what you are doing ?
The movement of his hands, up and down slightly make it seem like he is TALKING to the officer and perp while completing the action (placing it in the billfold).
The officer also makes a point of letting the other officers (tasked with COLLECTING the EVIDENCE) that the BAG (which was found in the perp's shirt pocket and laying loose on the ground after the initial search) was in the billfold. This seemed to be an attempt by the officer to CLARIFY why it was in the billfold instead of loose.
The only other option would be that the officer thought he would get a promotion if the bust included drugs.
1: I doubt that, given that they probably find drugs on most of the people they arrest in LA.
2: Again, he would have to risk carrying drugs on his person all day, with a high likelihood of being around police drug sniffing dogs.
This is what evidence bags are for.
Even if the “ultimate” conclusion by the jury and at appellate levels is that this remains valid evidence, it still resulted in wasting a lot of court time. We might well ask why do THAT? Because the officer felt so free to wing it? And if he’d wing something like this, what else would he wing?