Police, judges and lawyers probably don't know the difference between a DNA test and a DNA test. People used to go to jail because they had the same blood type as the criminal.
Right, but the issues with using geneology-resolution DNA to match a specific individual are already understood---you yourself have highlighted them.
A defendant is one expert witness away from undermining a case that relies on that low of a resolution of matching alone. In this case, that data was only used as a pointer to suggest to police that deeper scrutiny of the identified suspect was warranted.
DNA-based evidence led to a lot of wrong convictions in the early stages but methods have improved significantly. No judge would send someone to jail because a sample at 23andme matches. But they could issue a warrant to allow a further DNA test of the suspect.
There is significant lag between false convictions and proof of innocence. So, it might seem like a huge improvement but it's far smaller difference than you might think.