I see that inshaala was looking for ... but,

didnt find the "nipple coverage" shot in question

Since I don't have exactly the "blue uniform" mentality, I can't be entirely sure ...
but I think it's the third image in the Abercrombie & Fitch Photo Gallery. 

The online article, "Virginia Beach police seize photos from Abercrombie store" 
includes this statement,

"The other image is of a woman who is topless and whose "breast is
displayed with her hand covering just the nipple portion," Bernstein said.
"You could still pretty much see the rest of the breast."

I guess that it's safe to say that we shouldn't expect to see a nipple in this
case ... but it was considered offensive ... perhaps because it could have
been there. 

As regards 'topless' ... we shouldn't jump to conclusions ... for all we know,
she might have been bottomless, as well. 

--
Martin

p.s. Bernstein is a 'police spokesman' ... and is directly quoted in the article. 
... That means that the reporter wasn't just making it up.