The 1669 Act of Annexation (full text here) contains these important passages: (emphasis is mine).

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Crown Dependency:

It is not only fit in order to his Majesty's interest, but will be the great advantage of his majesty's subjects dwelling there That without interposing any other Lord or Superior betwixt his Majesty and them, they should have an immediate dependence upon his Majesty and his officers

Note: Although the term was yet to be invented, this passage is clear in its intention to make Shetland a Crown Dependency.

Disponements in the previous 200 years declared illegal:

And to that purpose diverse acts of annexation have been made from tyme to tyme .............. And yet importunity prevailing with his Majesty and his Royall father their goodness & inclination to gratifie their Subjects, they have been induced to give away and part with so great a jewell of their Croun, and to dispone and grant rights of the said Earledome and Lordship which being fund to be to the great prejudice of his Majesty, his Croun and Subjects and contrarie to the laws and acts of Parliament of this Kingdom

Note: All such disponements were in feudal form, which requires ownership by the Crown. The Crown did not have ownership and those disponements were therefore illegal. Not only does this show that that Crown had acted outside its power, but that it had to answer for so doing.

Shetland shall remain with the Crown for all time coming:

And it is Statute and Declared That the said Earledom & Lordship, lands teinds & others above mentionat annexed to the croun in maner forsaid Shall remain thairwith in all tyme comeing.

Shetland is excluded from any future re-arrangement of Crown property:

And farther it is Declared That if any generall act of Dissolution of his Majesty's proppertie shall be made at any tyme heirafter; The said Earledome & Lordship and others above mentioned & annexed Shall not be understood to fall or be comprehended under the same; And if the said Earledome and Lordship or any parte therof shall be annalied or disponed, or any right of the same shall be granted otherways then is appointed and ordained in maner above mentioned His Majesty with consent forsaid Doth Statute and Declare That all dispositions infeftments and other rights of the said Earledome & Lordship, or any parte therof which shall be granted contrarie to this present Act with all acts of dissolution and Ratification & other acts of Parliamt concerning the same shall be from the beginning & in all tyme coming voyd and null and of no effect;

Note: This means that the 1707 Act of Union could not have applied to Shetland (and that the Act of Union itself was null and void - but that's a tad inconvenient for the authorities).

Abolition of the Sherriffship. Setting up of a new office of Steward, directly answerable to the Crown:

And farther his Majesty with advice and consent of the Estates forsaid hath Suppressed the said office of shirreffship And hath erected and hereby erects a Stewartrie within the bounds forsaid of the said Earledome and Lordship and isles of Orknay & Zetland To be called in all tymecomeing the Stewartrie of Orknay & Zetland Ordaining the tennents possessors and inhabitants within the bounds of forsaids and other persons who wer formerlie answerable and liable to the jurisdiction of Shirreffship and foudrie above mentioned To be ansuerable to his Majesty's Stewart of the said Stewartrie of his Majesty's proppertie within this Realme.

Note: Where does this leave the current Sheriff? His office was abolished in 1669 and has never been reinstated.

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The 1669 Act removes Shetland from the influence of parliament and places it firmly in the care of the Crown - the only option open to Charles II in the absence of ownership.

Apart from the fact that he refers to the islands as his 'property', which, as the Treaty of Breda had just reminded him, he was no more entitled to do than any of his predecessors, the 1669 Act restores the situation as it was 200 years earlier at the time of the pawning.