The point of it is, I suppose, to react in a strange way, and let them know that you know. Most people would do one of the things you listed in Step 3 - not take pictures of the person taking pictures of them.

Not that this will help, or anything.

I'd say that unless you're a TV spy complete with a complicated plan, sidekicks and knowledge of how the script ends, the right answer here is "skip the high school psych-outs and talk to a lawyer yesterday".