But I guess we are still guessing what it means...
It's a CD key, plain and simple. They consider it a form of DRM, whether you do or not, though it is largely a toothless one. Basically if the game requires a key, then you can't install without a key, so if you put the game up on a torrent, either people can't play it (no key), or you give out your key with it. Doesn't stop anything in the practical world, except if someone decides to prosecute and trace the key back to you. But it is still a form of DRM in the literal definition of the terms, namely it is an attempt to manage the digital rights of the product, however weakly.
Arguing the semantic definition of DRM is like arguing what "open source" or "abandonware" means. These are all highly charged terms, which some people see in black-and-white and others in shades of grey. The definition that matters in this case is how ShinyLoot defines it. By their definition the only DRM that they allow are:
(1) None, if the game has none
(2) One-time CD-key type verification when installing a single-player game without an internet component
(3) A CD-key type of code for your online account when the game is multiplayer or has an online component
They admit that it is possible for sellers to insert DRM that they don't know about, and when they find out about that, they drop the game from sale. When I wrote them to ask if Trainz Classics had ByteShield, because it originally did when released by Auran, they contacted the publisher directly to check that. They confirmed that it once did but has been removed in the latest releases because the publisher no longer does business with ByteShield.
Have a concern about potential DRM in a ShinyLoot title? Ask them. Worked for me.