I have experienced the same thing. I can connect with it but it cant read anything.
It turns out that the tool only work with the disc and eshop versions and that it cannot with a loadiine version. It has nothing to do with firmware.
Your best bet is to wait for an updated tool that can work with loadiine or edit the saves manually (which I did to give my character massive breasts and a lot of money).
There's a way to edit saves? That would be great, do you have a link or instructions? I want to just get lots of materials and collectables from the beginning of the game so I don't have to worry about MMO-esque grinding for the rest of the game.