That's section A of DMCA 1201 that you're thinking of. There's also section B that forbids circumvention tools and that's way broader than the first part. The law distinguishes between breaking DRM, which can be OK in certain circumstances, and telling people how to break DRM, which is always illegal if you can allege some path from your tool to piracy.
And, believe me, it is actually pretty difficult to give someone a homebrew installation vector that does not also give you the ability to just pirate games at all. While there have been some homebrew scenes that deliberately added barriers to piracy[0], there's also been cases where piracy was the only hack you could even pull off[1]. Remember: if you have the ability to install your own code, then you can also install someone else's. Whether or not a jailbreak or homebrew installer would be considered a DMCA 1201 circumvention tool is something a judge would have to decide, but it's close enough to the line that I wouldn't personally touch exploit development.
[0] Off the top of my head: before A9LH/B9S, 3DS homebrew launchers could only run a custom executable format... though this was moreso for compatibility with the GPU DMA exploit they were using first and antipiracy was just a bonus.
The Wii scene was also extremely opposed to piracy thanks to Team Twiizers pushing hard against it.
[1] Also off the top of my head: the whole mess with 360 drivechip hacks that sucked all the talent away from actual homebrew enablement.
Both sections of the DMCA don't protect against tools (and trafficking of tools) that can make piracy easier in an indirect way or somehow pave the way for ease of access to pirate conduct. What they only forbid is circumventing copyright protection systems that protect a specific work. Same goes for the anti-trafficking provisions.
The statue reads "without the authority of the copyright owner" in the end. That sentence implies that the bypassed protections must protect a specific copyrighted work, not copyright in general. Otherwise there would be no "copyright owner" to authorise the bypassing as the law is currently written.
And, believe me, it is actually pretty difficult to give someone a homebrew installation vector that does not also give you the ability to just pirate games at all. While there have been some homebrew scenes that deliberately added barriers to piracy[0], there's also been cases where piracy was the only hack you could even pull off[1]. Remember: if you have the ability to install your own code, then you can also install someone else's. Whether or not a jailbreak or homebrew installer would be considered a DMCA 1201 circumvention tool is something a judge would have to decide, but it's close enough to the line that I wouldn't personally touch exploit development.
[0] Off the top of my head: before A9LH/B9S, 3DS homebrew launchers could only run a custom executable format... though this was moreso for compatibility with the GPU DMA exploit they were using first and antipiracy was just a bonus.
The Wii scene was also extremely opposed to piracy thanks to Team Twiizers pushing hard against it.
[1] Also off the top of my head: the whole mess with 360 drivechip hacks that sucked all the talent away from actual homebrew enablement.