Does it actually help with pickpockets though?

I've never had it stolen, so...perhaps?

I feel like if anything, it advertises its location

Where else would it be? Don't right-handed people store it in their right front pocket? And since most people are right-handed...you're going to be correct most the time.

with a good strong yank the fabric loop is attached to would just rip out.

That would be a helluva strong yank, though, and it would certainly be much more difficult than just lifting the wallet out. Nothing is going to be 100% secure. It's about making the theft as difficult as possible.