Yes, of course it does, as with any modification you do without declaring it, that is why I never get the point of engine swaps, as most insurance companies will charge you a fortune as the car is classed as custom/modified, for the money you pay you mights as well just buy a more powerful/better car outright IMO!

Re playing dumb, in the real world I really can't see that would work, it's a similar principle if you sell a car and don't transfer the name on the log book, any offences committed by the new owner will come to you, or if your driving around on a bald tyre, the fact that this happens by people who don't know better, but they would still get done if pulled by the cops!

Badges does seem a bit extreme though, but there again I wouldn't be so sad to do such a thing!

Martin