Ah! OK. I get it now! The hack to enable root was flashing the kernel image to the recovery partition. Since they used the same signature. Recovery mode in aboot doesn't protect /system so you can mount it read/write.
If you are bootlooping, try just flashing the stock recovery to the recovery partition from fastboot. Next boot, the update will apply. Then flash the pwnmymoto recovery to the recovery partition again after the update and you should be good to go!
In other words... The kernel image does not have the recovery ramdisk. So flashing the stock recovery image allows recovery mode to flash the update. Then switch back to the kernel image on the recovery partition.
If you already had root, this should keep it.
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