So for months I've been merrily swapping my HDD between a banned and unbanned console with no problems. Profile and saves stayed in tact and games were able to be installed on the banned console. This is of course because the console was banned a long time ago not from the last wave which cripples features.
However, I sometimes plug in the ethernet cable after starting my banned console to stream some music while I play and stay off xbox live. But stupidly I left it in one time while starting up and it attempted to auto logon to Live. I got the banned message and now I have the crippled features. I'm angry at myself for losing the features, but wanted to warn people that may have one of these older banned consoles that they can lose the hdd install and get corrupt profiles if it ever connects online.
So it appears that prior to the last ban wave, the bans just block connectivity. Possibly with the fall update it added a ban check to block features and save transfers. It appears the feature block is flagged by connecting online and not by the dash itself. So those with old bans would not get feature block even if they update the dash, only if they connect online.