Why would anyone want the firmware hack to block live? It's not like connecting to Live has anything to do with whether or not you get banned when you eventually do connect to Live.
From everything I've read, if you had a box not on Live, on the fall version of the dash, ran the f/w mod, played backups, then signed up for Live you'd still be banned eventually. Checks are happening in the kernel (dash) that flag your account the next time you connect to Live... It's not just "playing backups on Live" that bans you...