Importantly, this unauthorized option isn't an open flood gate for pirated games, but rather a means by which users could install signed and encrypted executable files -- in other words, "retail" .pkg files like the ones Sony uses for PSN downloads. While no current homebrew application is packaged like this (and therefore compatible with the custom firmware), it would be possible for homebrew developers to re-package their files to be installed through the CFW. (PSJailbreak offers similar functionality, DigitalFoundry explains, but as its name implies, Jailbreak allows for the installation of unsigned, unencrypted code.)
"Since the kernel is left unmodified, this means that this custom firmware is really meant for future homebrew installation, and it will not allow piracy," writes KaKaRoToKS in a blog post about the CFW. "I plan on keeping it that way."