Let's clear something up here:
Homebrew apps will always show up on StreetPass to other people as your last played title because the app icon, label, and ID are sent directly from your device to theirs. That's why if you StreetPass someone after opening something like HB Launcher Loader, they'll see it as your last played title.
However, if you set a homebrew app as your favourite on your Friends List or someone views your profile while you're running a homerew app and online, they won't be able to see that custom app unless the same app is already installed on their system. That's because the app icon and other data isn't being sent directly to their console, but instead when you set the app, it sends the app's unique ID to Nintendo's servers. When someone looks at your profile, it reads the app ID only and then checks if your 3DS already has information on it. If not, then it checks Nintendo's servers for the app's details. If it's still not found then your profile will display a "cannot display game information" error or something along the lines of that.
The reason for this difference is because StreetPass is completely separate from the Friends List. Titles sent through StreetPass are passed directly from console to console, whereas titles on the Friends List have to pass through Nintendo's servers first.
People are getting confused because the Favourite Title feature is from the Friends List, not StreetPass and that's why it doesn't work there. Also, the reason why H&S is showing up is probably because the spoofer is using the same ID# as the H&S app.