Yep, based on my layman understanding of what I've read, the issue is that in the US purely fictional "sexual loli art" would be protected by the First Amendment *but* if it's classified as obscene with no artistic value then it can suddenly be criminal - but there's no definition of 'obscene' or 'No artistic value' beyond "We'll know it when we see it" which is why it's essentially something left for local jurisdictions to decide because federal government/Supreme Court don't want to touch it due to how impossible it would be to actually define in law. So it's indeed a wishy-washy situation because to me it seems the legality is up to people feels and how badly the local courts hate your art.

And the situation is still better in that regard the US than in various other Western countries where loli/underage sexual art is just outright illegal and equivalent to child porn (never mind in the rest of the world).