I randomly started thinking about this today
Turns out my initial suspicion seems to be correct - the steam pipe update broke sv_pure and they never really cared.
stephhttps://github.com/ValveSoftware/Source-1-Games/issues/2761
I opened an issue (referencing this post) on valve's source1games github, maybe they'll respond to it because lord knows they're not reading emails.
https://github.com/ValveSoftware/Source-1-Games/issues/1699
They've had issues reported as far back as March 2014.
edit: https://github.com/ValveSoftware/Source-1-Games/issues/887 June 2013
They don't care about github either it appears.
(Also lol at the guy that commented that they should fix some irrelevant mp3 file issue before they fix game breaking exploits)
I'm gonna take some time later today and see what other dumb shit can be done because of this. Probably won't give everyone the free cheating tutorial but will let you guys know what I find