That disc was specifically designed for store retail display demo consoles.
These guys:
As these were free-standing devices that couldn't connect to the internet, updates had to be sent out via demo discs, which installed them on the machine. Since they were designed to only be used for retail displays, the update would put several limiters on the system (notably disabling the xbox guide button) to prevent customers from tampering with them, which they would if given the chance (For a colloquial example, where I worked, before the 360 kiosk, we had one for the original Xbox, in which we just had a full copy of Battlefront II in as we had no good demo discs anymore. Longest that game went without someone wiping the data or making an offensive profile was 2 days.).
Once installed, the only way to turn a retail 360 back into a regular 360 was to do a complete reformat.
These would be the two 360 kiosk discs I have: