Wow, that's a major blunder by Motorola. Seriously, why buy such an impressive DRM from TI if you're going to leave it in engineering mode? Here's my understanding of the exploit given the tweets (I'm probably wrong):
When the OMAP is turned on, it loads the first stage bootloader from NVRAM in a secured part of the chip. This NVRAM is locked so you can't modify that bootloader. The first stage bootloader is very small, since NVRAM has extremely limited storage, so it verifies and loads a larger, second stage bootloader, which continues along with the boot process. Since the NVRAM is locked the chip will always start with Motorola's software which will do all their signature checks.
The exploit is when you upgrade the firmware. In engineering mode, apparently the bootloader is unlocked during the upgrade. An unlocked bootloader is writable, so we can replace it with one of our own with a specially crafted "ROM" (hate that term, but I'll use it so people know what I mean). From there, we can completely replace Motorola's software with whatever we want. Heck, we could even install something other than Linux, with a different partition layout, filesystem, kernel, and everything.
As for nenolod's frustration, I can see where he's coming from. Android may be an open source OS, but the developers are commercial through and through, and the fans are a more normal sort than your average Debian user. The open source world is highly philanthropic and obsessed with technology, but far less concerned with what you do with it. Developers will open the door for possibilities, but you are expected to solve your own problems (and hopefully share the solution so people can build upon your work). Showing a developer a lot of attention isn't a great idea since they're developing for their own reasons, not yours.