Its main function is to report a parameters.txt file of a car that has been changed and is no longer in accordance with the original. Anyone that try to improve some car's handling or top speed to have advantage during a multi-player session will have the cheat tag displayed next to their names to warn others that they're trying to cheat. It is also displayed when CARNIVAL is used or when the Dev Mode in Re-Volt 1.2 or RVGL is activated. Therefore, the only way to not display the cheat tag for stock cars is to legally unlock them through the game modes.
The cheat tag is displayed for special cars automatically, even if their parameters weren't modified. The same goes for custom cars. This turns the cheat tag inefficient for sessions in which special or custom cars are allowed by the host.
After the 17.1009a release of RVGL, car parameters of players are compared with the ones of the host, displaying the cheat tag for who do not have the same file. Using it with the -autokick command will cause any player with different parameters to be kicked off automatically. If the cheat tag is displayed for everyone, this implies that the one who have modified parameters is the host.