I think you misunderstood the threat model. The concern is that they seized your phone, used the exploit to bypass the "normal" passcode protections, allowing them to bruteforce your 6 digit passcode in hours/days rather than years/decades/never (if you had the wipe after 10 failed attempts enabled).

That is not possible, the key is inside a hardware chip which enforces the number of tries for the PIN.

Now they do. That wasn't always the case though, for those on older devices (Anything older than the 5s, I believe), or older iOS versions.