But it turns out, it doesn't really matter in practice. You removing the DRM from the image is a completely different legal aspect than you saving an unprotected JPEG. Circumvention of the DRM is easier to sue for than pure copyright infringement. SmartFrame's business value is that it protects just enough for an IP insurance to cover you, while not slowing things down unnecessarily with better encryption (that won't stop determined techies anyway).
Also, by "recovering" the image in this way, you strip it off IPTC copyright metadata which makes your copy illegal to use in the UK, for example.