Look, I get that there are people who want cheats and don't want or can't get CFW, just was commenting about the Stargate part
As for how this one works, it could be the same as the extended Action Replay (one that had a cartridge slot at the top) was on the NDS. It appears thin in the pic though, so it most likely won't be like that. However, if it ends up like that, it will simply function by taking the data that would normally be exchanged between the cartridge and the system and changing select bytes, then forward that data to where it would normally go. For example, playing Pokemon, it will forward every bit of data, but will change the bytes that correspond to, say, item slot 1 in the bag so that it's value is x99 or something.
If it's not like that and is instead the type that you use first, then remove and put in the game cartridge, it could simply have a mock "custom firmware" that gets loaded temporarily when you use the cart, activating some sort of overlay that stays active until you turn off the system or something among those lines...