Yes, the ring around the edge blocks two sides from rotation. This can also be done with a suitable padlock or trick lock, but the Cast Loop has just the proper size, and it is very easy to remove.
The locked edge defines the colors of the (imaginative) center cross, so you get rid of the odd parity, and the Void Cube orbit is reduced by a factor of two. It is just like bandaging one edge with both adjacent centers on a standard 3x3x3. Jaap describes it as subgroup (4n) on http://www.jaapsch.net/puzzles/subgroup.htm
and provides some useful move sequences on the same page.