There is even a trickier part: they do actually have jurisdiction over the dollars you think you own, because the dollars are just debt that they can claim at any moment.

But Bitcoin is not debt, so they have zero right to claim it.

So detaining somebody that creates an open source wallet over a supposed crime of dollars is totally illegal, because no dollars are ever used ever on it, and they have zero jurisdiction over Bitcoin. It's not created by them, it's not debt, they can't claim it.