It is rarely that police arrest people without adequate suspicion.
I suppose it means that:
The police rarely arrest people without adequate suspicion.
but I couldn't find this in my grammar book.
Is this sentence pattern possible?
As this NGram shows, OP's specific construction is rarely used these days...
My guess is that many of the (relatively few) instances in recent decades will either be citing older texts, or they'll be things like [but] it is rarely that [simple], which isn't quite the same usage.
The adverb/adjective issue is a sterile debate. Indeed, as OED specifically says under rarely (phrase)...
Having said that, as the above chart implies, and this one makes crystal clear you should stick to the more "regular" adjectival form in this specific construction today.
A similar usage shift involving adverb/adjective forms has occurred with it is well that vs it is good that. It's not that the older form was (or even, is) "wrong". It's just gradually fallen out of favour
The adverb rarely generally modifies a verb or a form of a verb, as in: We rarely walk. We prefer to take a car.
is an example of it-cleft.
Clefting is a construction by which a single sentence is broken up into two clauses so that the clause moved to the front receives more emphasis.
Let's see how it works in your example:
and imagine we wish to emphasize how rarely this happens, then we would write:
Imagine, however, that we want to emphasize people without adequate suspicion, then we would write:
Regardless of the explanation above, as Fumble Fingers clearly shows, you're better off if you stick with:
More on the grammar regarding this question can be found here at ELU.
We have two rules of grammar that can apply here. The first is that an adverb modifies a verb, and to be is a verb. The second is that a "predicate adjective" can modify a subject, using a "linking verb" such as "be" (feel, look, seem, appear, etc. would be other examples). Since both rules can apply, which one is actually applied is a matter of habit and/or style, and therefore a challenge for a non-native speaker.
As FumbleFingers has touched upon with one of his examples, it would seem that we are moving from using the first rule to the second one. It would also seem that we haven't quite moved all the way there yet. For example, "the pie tasted well" is quite old-fashioned by now, having been pretty much entirely replaced with "the pie tasted good" in the 20th century. On the other hand, "I don't feel good" and "I don't feel well" both occur regularly, while "I feel good" is much more common than "I feel well." Furthermore, "I feel poorly" is a midwest-US colloquialism, meaning the same as "I don't feel well". ("I feel poor" would have the unrelated meaning that the person didn't feel rich.) So, clearly, there's an inconsistency in usage.
Clearly "it is rarely that" is antiquated. However, it is well/good to keep in mind that if another noun is provided for the verb to act upon, the adjective will revert to an adverb:
One further point is to avoid confusing action verbs with linking verbs, and thereby using adjectives where adverbs belong. These are all considered incorrect grammar (although they are often used, especially in the US):
This is a it-cleft sentence, and it applies a stress on the rare occasion of police arresting people without adequate suspicion. In other word, without giving any stress it could be written like this -
In this sentence rarely is an adjunct. It's a frequency adjunct. We can consider it as a form of time adjunct.
And so it can correctly occur in the focus position of an it-cleft sentence. Hence the following sentence is correct -
(OED has an entry for it's (very) rarely that...)
An adverbial can be divided into four categories - adjunct, subjunct, disjunct and conjunct.
But it's only the adjunct, and not other adverbials, that can occur in the focus position of an it-cleft sentence.
In negative or interrogative all adjunct can occur in the focus position of an it-cleft sentence. But in positive sentence not all adjuncts can occur in the focus position. Some need modifiers, and some can occupy the position without the use of any modifiers.
It's the manner adjunct and degree adjuncts that takes modifiers -
The time and place adjuncts can occur in that position without the help of any modifiers.
[I will try to update it later with more info]