As far as the issue of the government claiming, confiscating, or otherwise wanting the return of an expired passport is concerned, they don't seem at all worried.
When I renewed my passport in 1998 it was easiest for ID purposes to send my old passport with the application, but I wanted to be sure I would get it back - Partly because it's the last "real" British passport, and partly because of the U.S. immigration stamps inside, just in case I ever needed them. I was assured it would be returned, which it was, with "Cancelled" stamped across the appropriate pages inside and just a tiny corner of the front cover clipped. (Had they not assured me it would be returned, it would have accidentally been "lost," of course, and I'd have gone to the trouble of getting other certified identification.)
I still have one of my mother's old passports from the 1950s, never canceled, although long since expired of course!