It's not an application , it's a patch. Also he doesn't explain that here he is just talking about bog standard retail consoles.
OK Patch w/e. Well most people who are banned are either for being Jtag'd, or playing pirated games. And if those people were risky enough to mod they're consoles to pirate games, it's not a stretch to see them Jtag'ng them to play online for free.