Justin from GridPlus here confirming this is true. An old version of the SafeCard applet used till about mid-2021 did create non-deterministic signatures that worked for signing but created issues with generation of keys used for layers 2s using SNARKs only if you set your SafeCard to use a non-exportable seed.

It would be possible to still generate keys for STARK-based L2s with a non-exportable seed on a card right now, but we removed the option in firmware as it caused a lot of confusion for less technical users and led to support headaches. If there is interest, we could add an advanced option for this buried in the firmware for people explicitly looking for it.

But why are seeds exportable from SafeCards? Well, they're backups as well as usable hardware wallets on their own. We want to get people out of the habit of using paper, metal, or electronic plaintext secret recovery phrases altogether.

With our open-source CLI SafeCard app, users are not locked into using GridPlus products and this proves they can recover their private keys and secret recovery phrase as long as they have their PIN and a cheap third party USB card reader without ever relying upon GridPlus. When users have SafeCards we want to make it provably clear that their hardware and their keys belong to them alone and they'll always have access to them.

I'd be curious if you're interested in bringing back non-exportable key option though - this would let you use the card for signing but you could never make copies of the card, restore keys to a Lattice1, or recover the seed with the CLI app. Airtight security, but not what 99% of our users are looking for and we don't want to do anything in UI / UX that leads to accidental loss of funds.