Play video content Exclusive Ambjaay/Baabyhunter

The young rapper whose earned praise from Kylie Jenner, Drake and Meek Mill had a very public run-in with the law that ended with his arrest ... and his reps are calling the move racist.

Rapper Ambjaay -- famous for his hugely successful track, "Uno" -- was busted Thursday about an hour east of L.A. in Rancho Cucamonga after directing hundreds of high school kids to show up to a nearby park for a free pop-up concert.

So, why the move? The 19-year-old rapper wanted to reward the students from Rancho Cucamonga HS after a video showed them turning up to "Uno" last week ... hence the free concert. Problem was ... Ambjaay didn't have a permit, this according to law enforcement sources.

Waiting for your permission to load the Instagram Media.

We're told police responded to the park and told Ambjaay he had to shut it down, but we're told he instead directed fans to another park. Cops tell us they got wind of this ... and that's when they pulled him over, searched his car and arrested him for disturbing the peace. He was later released.