The 360 hack I’m familiar with was just a reflash of the DVD drive firmware to always return data to the console as if the disk were legitimate.

This became a cat and mouse game between hackers and MSFT as MSFT started measuring things like latency and expected angles between blocks of data on the physical media to tease out whether the reported legit disk was actually legit or an imperfect copy.

I remember a few ban waves where people using modified consoles had their Xbox Live accounts shut down, then I stopped following it after that.