I think an important detail here is that Rosetta did something beyond traditional homology models- it basically shrank the size of the alignments to small (n=7 or so?) sequences and used just tiny fragments from the PDB, assembled together with other fragments. That's sort of fundamentally distinct from homology modelling which tends to focus on much larger sequences.
3-mers and 9-mers, if I recall correctly. The fragment-based approach helped immensely with cutting down the conformational search space. The secondary structure of those fragments was enough to make educated guesses of the protein backbone’s, at a time where ab initio force field predictions struggled with it.
Yes, Rosetta did monte carlo substitution of 9-mers, followed by a refinement phase with 3-mers. Plus a bunch of other stuff to generate more specific backbone "moves" in weird circumstances.
In order to create those fragment libraries, there was a step involving generation of multiple-sequence alignments, pruning the alignments, etc. Rosetta used sequence homology to generate structure. This wasn't a wild, untested theory.
I don't know that I agree that fragment libraries use sequence homology. From my understanding of it, homology implies an actual evolutionary relationship. Wheras fragment libraries instead are agnostic and instead seem to be based on the idea that short fragments of non-related proteins can match up in sequence and structure space. Nobody looks at 3-mers and 9-mers in homology modelling; it's typically well over 25 amino acids long, and there is usually a plausible whole-domain (in the SCOP terminology).
But, the protein field has always played loose with the term "homology".
Rosetta used remote sequence homology to generate the MSAs and find template fragments, which at the time was innovative. A similar strategy is employed for AlphaFold’s MSAs containing the evolutionary couplings.
