Essentially, Exploit is a “cheat mod”, which, by using the terminals (door locks, generator controls, etc.) present in the game world in a specific way, gives access to various exploits ranging from increased ammo capacity through longer sprinting to complete invulnerability.
With Exploit mod these situations are possible. “IFF Jammer” makes enemies not to recognise Fletcher as a foe (so they're standing still and awaiting execution). “Lock Bypass” makes locks unlockable even when environment is unsafe (enemies are present).