It doesn't so much disable as it never enables the clock check function. It was just xboxdash.xbe doing a check for a set clock before booting fonts that caused the problem. update.xbe just never does this check.
OK I'm being picky

But yes, "ULTIMATE DASHBOARD EXPLOIT" is a small hint too
Actually the clock check is performed by the kernel which then calls the xboxdash.xbe. Since the update.xbe has no posibility to handle this call it just runs the xbe.
I tested it alot of times..all it does is Set your Clock to a Default time..some times the extact time
when the Aliens do it for you lol
mohahaha australian rat, wrong lol
*sniff* OK I wrong
*hides in corner*
don't some dashes (can't remember which) allow you to set the clock?
yeah: evox, avalaunch, xbmc and probably some others. You need to be connected to the internet though
MXM has a script that can automatically set the time/date to valid values without access to msdash or a timeserver.. I have it set up to avoid the need to use msdash if I take my xbox on the road. I hate having to set the clock manually.
i wondered why my clock wasn't reset because i unplugged my xbox for a few hours while i did some work on my room and when i plugged it back in and loaded MXM the clock was fine.
well some xbox clocks reset after a few hours and some will last almost a day.

It doesn't matter at which time the clock is set but it does matter that the clock IS set. Some games use the clock for the auto-save feature and will hang if the clock isn't set. Any time between something like 2000 - 2010 will probably be fine.
i recently installed the UDE... it works perfectly with PBL-Lite!
and no clock loop!