the modified firmware is not the problem, correct?
If I were to flash my drive with new FW my console shouldn't be banned, right?
I think your referring to firmware (in this sentence) as the NXE ? ...but either way no
So, if I actually get all this, the general consensus is that it has something to do with poorly made backups that lack these so-called "stealth codes"?
fact, and yes (stealth files
to be precise)
As far as I know my console has not been used to play any backups ever, however I did get it used so I'm not 100% positive on that, but if it hasn't and I manage to get this iXtreme firmware and use only backups that have been run through pass this Mulleter and/or this AGBX thing I should be fine, right?
Yeap 100% correct, you will be fine