its not vsync its just the application (driver?) starting in 3d mode
the tweak is based round forcing the monitor into 3d mode when the game is just running normally, seems like the hack doesnt always work correctly that way and TF2 will launch in 3d mode which caps frames at 60, then if you ctrl-T back to 2d from there it is capped at 120. This mode also fucks up input lag fiercely (at least for me).
as far as readability i'm not denying there is less motion blur (because the tweak eliminates it) but I've just found that having no motion blur doesnt seem to make it any easier for me to track moving objects. It generally looks more "crisp" but if anything the flickering refresh makes motion look less smooth and seemed harder on my eyes
it also really kills the perceived brightness of the picture since the backlight is off half the time