You're correct about the Latin origin and legal usage, "in the matter .." is strictly correct.
That said, English as a language absorbs and morphs borrow words and phrases like few others and re has moved out of legal only and into common office and other usage where many are no longer tied to a strict law reading.
Latin in means in or on, and res means thing, but that doesn't make in re valid Latin for the English phrase "in the matter [of ...]", any more than quomodo pendet would be valid Latin for the English phrase "how's it hanging?".
For the meaning expressed by "re" in office usage, I'd be more likely to use "wrt", which has the benefits of being English and making sense when read aloud.
Bearing in mind that I'm recalling back 40 years and not looking anything up, it's my recollection that the legal usage in English law is "in the matter of" with the Latin "re" being a contraction of a longer phrase ...
When I said strictly correct I meant that was what was taught in pre law as the correct reading of "re:" when seen .. it's barbaric contractions all the way back to proper Roman law ~ 400 CE I suspect and I'm no learned Latin scholar - I faked my way through it on the STEM side of campus and only ventured into Arts to watch theatre and listen to music.
> it's my recollection that the legal usage in English law is "in the matter of"
This is a tangent, but in Latin that "of" is not included in the re; it would have to be marked on whatever noun is governed by the "of" in English. Including the "of" makes the English translation better, but slightly less literal - in the most technical possible sense, the "of" is implied rather than explicit.
In English it's easy to indicate that some word or phrase requires an argument marked with "of" by just including the "of" when you cite the word/phrase. In Latin this can't be done. A dictionary (aimed at modern students) would say something like "res +gen" to note that an expression requires an argument in the genitive case. I don't know how Latin speakers would have described this, but the need must surely have come up.
Tying back to my earlier observation, it might interest you to know that the word "of" is derived from "off". The reason is kind of funny: off is a (correct!) translation of the Latin preposition de. de doesn't mean "of", but it does mean "off". Latin has no preposition for "of".
However, in Romance, the case system of Latin was lost, and de was repurposed into a genitive marker. That's why it means "of" today in Spanish, French, etc. I assume this had already happened by the time English translated it as "off", and that's why the genitive particle "of" developed, but I don't know for sure.
That said, English as a language absorbs and morphs borrow words and phrases like few others and re has moved out of legal only and into common office and other usage where many are no longer tied to a strict law reading.