Exactly.
That only matters when you fly at an NAR (or TRA) launch and need to show the certification to the NAR launch officials to "prove" that you know what you are doing. Furthermore, you can be certified L3 and still have no experience or competency with hybrids.
True, it has nothing to do with hybrid motor materials (assumimg rather inert plastic fuel grains without imbedded oxidixer), which are MUCH safer than PB and APCP motors. I think it is codified in the NFPA "fire codes" because the NAR/TRA saw hybrid motors as a subclass of HPR motors and they wanted to codify it there.
The likely injuries ate those that arise from lugging the support equipment to the launch site, and this is also the reason why you don't see terrorists, or miltary forces using hybrids.
Alan