An inmate's love for math leads to new discoveries

I think that would be a hard policy to sell. Some crimes are so heinous that letting the perp free would seem gravely unjust.

What if a man solves one of the problems in secret before committing a crime? Your suggestion could then be interpreted as "permit millennium problem solvers to commit, with no legal consequence, any one crime of their choosing." That would seem like a questionable proposition to anyone not fully devoted to mathematics.

Why not start by simply making prisons humane?

I don't know if you've ever visited an American prison, but they're a vestige of 19th-century social mores (ie - norms from an era where slavery, then Jim Crow, seemed reasonable to the average American). If you want to empower prisoners to study difficult topics like advanced mathematics, you're probably going to have to start treating them like people first.