Pretty sure you can still install system updates on USB using Recovery Menu, so yeah, the option is there, but the FW installer knows the difference between CFW and OFW.
I don't want to sound rude, but hacking the PS3 is quite complex and devs are usually people who've already graduated, you can't really think of ways of exploiting this If you have no experience in reverse engineering. You'll most likely come up with things dev already tried or just useless theories that don't really make sense.
superjon27, you shouldn't update to this CFW at all. Sadly this CFW was kinda rushed and not very reliable, he will work on another version.