Yup - literally puts something in the way of shifting anywhere other than 4th, at least until your revs go somewhere other than the pre-set range in which the CAGS gets activated.
It's not anything you can't drive around, usually by getting on the gas enough to go above the CAGS window, but it's a real PITA in some situations. Stop'n'go traffic can be annoying, but the worst is when you're stopped, say at a light, and you're going to immediately turn as you pull away - like when you're at an intersection for instance. You pull away at relatively low throttle, but not parking-lot low, you've turned on to a main road, and DAMMIT! I'M LUGGING IN 4TH AT 20MPH!. You shift back into 2nd or 3rd, lurching as you do it, and everyone around you looks at you thinking you haven't figured out how to drive a manual.
But you can get rid of it by reprogramming your tune, (retuning your program?), buying a Skip-shift-eliminator for $15-$60 on the web, or getting a resistor from Radio Shack per the instructions on LS1.com, and sticking it in the end of the cable that activiates the wretched thing - fooling it into thinking it's jacking with your drive, when in fact it is signalling to a resistor! Yay!