A) That "behavior" had nothing to do with AVS or Tivo. It was discovered by a member of the forum who posted it, then removed it, and finally posted it again.
B) It's now in the Tivo Hack FAQ which is made by these same members, not by Tivo or AVS.
C) You got it wrong. It's:
crypto -u -srp "factory"
to reset it. Without the -u it won't work, and you have to use double quotes.
Otto, Supreme TiVoWarrior - Moderator - AVS Forum - Tivo Underground