It only works for things where the key is stored on the chip or phones where the key is stored in a TPM or equivalent and relies on a PIN to release it, as opposed to typical use of encryption where the full key is entered to unlock. An attacker with physical access can probe the chip but it’s risky - one slip and it’s gone for ever. This technique is most useful when all chips of this type have the same key so you only need to successfully crack one, any one. Ross Anderson’s book Security Engineering uses the example of Sky Pay TV cards https://www.cl.cam.ac.uk/~rja14/Papers/SEv2-c16.pdf