Most of the time they are either destroyed or awarded to the agency who seized them.
They pack it up, label it and put it into a huge storage room full of evidence, drugs, weapons and other confiscated goods. Though there are chases of police officers stealing confiscated evidence it is unlikely that the confiscated item is somewhere else but the police department.
Jail
She looked at him scornfully, with a mix of disappointment and disapproval in her eyes.
to remove threats to his power, the emperor confiscated all weapons held by is people
They probably take it away from you and you get a fine...Just a gues though.
Nothing "happens." You just unlock all small weapons and can access them in Villa Auditore to use them as you please.
He got killed
They are confiscated and probably sit in an evidence locker for the remainder of their "life." Scientist may run tests on them for research or evidence and such.
The man had his cameras confiscated from him after taking photos in a theatre.
I've never heard of them selling confiscated weapons. Some will be kept for reference purposes. As to the rest, I suppose it is possible one could be transferred to a museum or another LEO.
confiscated
Strategy and whatever happens to be there.