You might be thinking too literally. Many people rent time in otherwise-unused commercial kitchens (churches and synagogues often have a commercial kitchen, for example). It isn’t “at home” but neither do you need to own your own full time catering facilities.
You can also make non-food items, like homemade pet treats at home, and you don’t have to conform to any food safety regulations that I’m aware of (disclaimer, may vary by state law).
In addition to what Hello Again has said, keep in mind that state, county and city rules all vary on what is permissible and where. There may be volume exemptions, or exemptions based on what’s served.
Short answer, they dont.
I know a lady who makes pies at home and sells them, she gets inspected just like a restaraunt does, she had to make several modifications to her kitchen to be able to legally operate.
Long answer, until someone catches you you can do what you want. If you sell a few pies and cakes a week to friends and aquaintances you can fly under the radar indefinitely. As soon as health department or a competing business becomes aware of you (they will probably call and make a complaint which will trigger an inspection) you will be held to the same standards as any other food handling business.