Basically just that - if someone is attempting to reflash their EEPROM and it doesn't work as expected, all they get is a flashing red light. The only way out of this is to either reflash with a modified version of cromwell, or use an embedded BIOS.
XBTool has the feature already to embed an EEPROM into an X2 BIOS (pre 4983), so those with 1.0-1.5 Xboxes are fine. However, 1.6 owners aren't so lucky. If it could be incorporated into the X2CL BIOS it would be the first time 1.6 owners could boot their Xboxes properly if their EEPROM was screwed.
Martin