(And region codes aren't what I think of today as DRM. They've never been much more than silly speed bumps, so I wouldn't expect them to be at the heart of what's going on here.)
They do, because a key can be obtained externally, such as with a software library made for decrypting the discs.
In any case, thanks; I think I finally understand what's going on here. Based on what you've written, custom firmware is not actually required, but it makes things more convenient (especially for folks without much technical experience).
This is correct for normal blu-rays, but not the UHD ones, since they add another layer of encryption. There's some nonsense going on with VUKs and MakeMKV not being able to decrypt all UHD discs, since some are encrypted with keys that aren't easily available (though you can send in a dump of the disc to the devs and they'll often change that fact for that disc).
If you know of a software library that can decrypt any random UHD disc without external keys, then please, do tell, since the MakeMKV people apparently don't know about it.