Based on reading the links someone posted, my understanding is that the way this CNAME stuff works is:
1. awesome.example.org would add a CNAME record that resolves tracking-you.example.org to the server referenced by evil.com
2. awesome.other.net would add a CNAME record that resolves tracking-you.other.net to the server referenced by evil.com
3. etc everywhere on the internet
Because these are CNAME, DNS hides all of this from the browser and it just sees the resolved address and the original requested name.
So tracking-you.example.org and tracking-you.other.net both now think the server controlled by evil.com is first-party. evil.com now gets all the first-party cookies. In the past they would have only got third-party cookies and the first-party cookies wouldn't be seen by evil.com.
But it gets worse because evil.com is also tracking you (it's what they're explicitly doing) so they can link users across the sites. This means evil.com has all it needs to spoof you cross-site because they now have all the first-party auth tokens. Unless you diligently never use the sites simultaneously and remember to log out between using websites. But even if you did, they can still do anything they want as you while you're logged in to the site.
So, yeah. It actually looks like a disaster and we're super screwed.