That is a very odd side effect to be having.
The registration file is exactly what they Kindle expects to see.
And the iptables rules, well, I cannot imagine how they would force the font settings screen to show up.
Personally, I've never seen the need for this hack.
If you want collections that badly and you're already jailbroken, you are probably using the Kindle Collections plugin and Collections Manager kindlet.
Which ignore the not-logged-in restriction.