Client editing can still function by using the same directory tree that Lunia has always been under.
The imagesets.zip will take priority over the one inside the cfp or where ever the actual data is stored. (That's one hell of a compression if it is in the cfp)
I don't claim to know this method very well, so don't officially quote me here; From what I believe happens, all the data is basically packed up inside a file like a Winrar Archive, and when the game is running, it will load the files in that package just the same as if it wasn't packed. Otherwise Allm would have to do an overhaul of the client file system; honestly speaking, Allm wouldn't care enough to do that unless it really caused serious abuse.
The only major flaw when it comes to these encrypted packaged files, would be that NEW
data wouldn't be easily obtainable.
Unless Allm added anything new to any files since these encrypted files were released, any old edited data will function without glitching/bugs.