Q. Does this addon violation Google's policy on "Cloaking".
A. No. If this addon is used to display masked content to the Unregistered/Unconfirmed usergroup, GoogleBot will still see the same masked content as unregistered users. Only when content is displayed differently between GoogleBot and other visitors does Google label that action as "Cloaking".
Q. Will this affect SEO and indexing of my site?
A. Yes, if you want to mask content to Unregistered/Unconfirmed usergroups. It may negatively affect your SEO, or perhaps positively affect it. If you have a private forum that you want to make public, but apply this add-on to it, robots will now see thread titles and usernames to index, but they will not see, or see very little, legitimate post content. If you have a public forum that you apply this add-on to, your previously indexed post content will no longer be seen by robots. Your results may vary.
Q. Can you change this addon so that it will ignore visits from robots, not masking the post content?
A. No, that would be a violation of most robots' TOS.