But you can't exchange loot box rewards for money.

You can.

Steam has a market place for items that result from opening lootboxes.

Thats... the entire CS2 gun skin market.

You can sell those for actual money, that money is now in your Steam Wallet, and you can now say, buy a game with it.

I've done this a few times, selling off a bunch of random crap items I forgot I had, from a game I don't play anymore.

Then go buy a $10 - $20 game with it.

Hell I think I very partially bought my Steam Deck using similarly generated funds, paid roughly for the sales tax or whatever.

Beyond that, the actual lawsuit has whole sections dedicated to showing that Valve knows people buy/sell/trade these kinds of things on third party platforms, and they have very inconsistent policing of this.

I don't know enough about the law specifically to know if that in and of itself is some kind of actual crime, but it certainly doesn't look good that in a fair number of instances, Valve knows real money is changing hands for these items, and chooses to do nothing.

Hell, going further with all this:

I once knew a guy on a the dev team for a game that had been approved for Steam Marketplace items.

If him and a buddy wanted to try some new game?

He'd look at the Steam Market to see what of his game's in game items were very rare and thus highly priced.

Then, being the dev, he'd poof some of those items into existance.

Post em up for sale on the market and hey in 30 minutes, now he's got the Steam Wallet money to buy a game.

tl:dr: you very much can exchange the lootbox results for money, even technically literally physical tangible goods.