Continuity mistake: Lighting on the automaton changes between shots when Hugo uncovers it for the first time, notice the structure underneath: from hidden to visible.
Continuity mistake: Hugo tucks the beret covering his eyebrows, but a frame later it's above them.
Continuity mistake: When Uncle Claude shows up to deliver the bad news, Hugo turns around twice.
Continuity mistake: When Frick greets the lady for the first time, a waiter suddenly appears next to her in the second angle.
Continuity mistake: When Hugo leaves the notebook on the counter, it swaps from laying straight to skewed between shots.
Continuity mistake: At the toy-shop, Hugo empties his pocket and Méliès places his hand over the cloth and then takes it back. From the opposite angle, the hand is still over the cloth.
Continuity mistake: When Méliès shows up during the projection, Tabar turns around twice.
Continuity mistake: When Hugo is walking with his uncle, carrying the automaton, the way he holds it differs between the first and second shot.
Continuity mistake: The position of the automaton's arm when writing for the first time is inconsistent between shots.
Continuity mistake: When Hugo is outside Isabelle's place for the first time, he is standing by the middle of a brick column. When the angle changes he is by its side.
Continuity mistake: After the automaton stops, Hugo slouches on a sofa. His position differs completely between one frame and another.
Continuity mistake: When the inspector crashes against the band of musicians, the mess on the floor differs between the first shot and the one following.
Continuity mistake: After Isabelle recites the poem, the Inspector's head position doesn't match between the front and back angles.
Continuity mistake: When the kids are reading in the library and the author shows up, the kids flip all the pages and then the book appears pointing upwards or downwards.
Continuity mistake: When the inspector first approaches the flower girl, a luggage porter passes behind him. When the angle changes, the man is meters behind, repeating his previous movements.
Answer: He's not making it a point to chase down random children - he's like a security officer at an airport. It's his job to apprehend thieves and troublemakers and keep the station safe, and he only threatens to send children to the orphanage if they don't have parents for him to return them to. Also, it's implied once he finally apprehends Hugo that his particular harshness toward orphans (and most of his character flaws in general) is due to apparently having been one himself. He spells out the kinds of lessons he was forced to learn by growing up without a family, explaining how he became so cold, bitter, and antisocial.