It activated the super secret beta of Adventure Mode developed by Rotondo back in 2010. Once Pirate Scallywag was activated, you had to go into RTB's zip file and find a special Notepad document entitled "Pirate Scallywag". The document gave you instructions on how to activate the original Adventure Mode. If I recall correctly, you entered the Konami code six times, which would activate a small 1x1 brick to appear at the end of the tutorial. Activating this brick would send you to the Adventure Mod beta. A friend of mine who had been playing Blockland since 2009, Samuel, tried it out once. He said that there were 26 levels, the first being a tutorial. In the first real level, you had to fend off a wave of skeletons. However, the model for the skeletons was incomplete, and only their body showed. Levels 2 - 5 were a series, in which you had to kill a politician. You had many choices to choose from, such as Obama, Bill Clinton, and oddly enough James Madison. Levels 6 - 10 were boring explore the caves type levels. 10 - 15 were strangely Guitar Hero-esque levels where you had to perform weird 80s songs such as Whip It, and Come On Honey. The rest of the levels were generic fight the bad guys junk, up until level 25. Samuel said that this was his favorite level, as it was strange and incomplete. It required you to reenact 9/11, but the models for the Twin Towers were missing, so you were flying into a random avatar face. Samuel said that the first time he played, he got the lady face.
Finally, on the last level you had to fight Rotondo himself. Samuel said that the boss's model was of Philip Fry. You had to throw pizzas at Rotondo until he shot himself with a pizza rocket launcher. Finally, you had beat the game. Patrick Hernendez's 'Born To Be Alive' played as the text 'A Winner Is You' slowly transitioned onto the screen. After that, you were redirected to Badspot's Block Party. If it wasn't up, you'd be redirected to the RTB chat menu. Sadly, Samuel died in a car wreck back in January, so I obviously can't ask him anymore about Pirate Scallywag.
It really is a strange tale. Samuel said that the code for transporting you to 2010 Adventure Mode was still present in the latest RTB update the day before he died in the car wreck...