Yup, this is definitely the case. I went to 3.67, because I was tired of being blocked from the store, not being able to sync trophies, not being able to download game patches and DLC, as well as playing physical games that I rightfully bought. When I heard I could update to 3.67 (which was the latest at the time and allowed me to remedy all the previously listed issues), I was ecstatic. I am not blaming anyone, but I wish it was said from the get go that 3.67 was only temporary Henkaku, not everything up to 3.67 will be patched and working!
Oh well, life lesson like you said. I am not updating my Switch above 4.1.0 because of this reason!