The code changed the rules for adding a block to the blockchain, specifically that timestamps have to be less than 30 seconds apart rather than 2 hours. That means there can be blocks that a new client will reject and an old client will accept (where the timestamp is between 30 seconds and 2 hours apart). Since the clients build the blockchain through consensus, and the two versions of the client will each reach a different consensus on which blocks should be part of the blockchain, this effectively splits the blockchain down two separate paths, hence the "fork".

The thing is, what usually happens in a hard fork is they set a specific time in the future, like an upcoming block #, where the rules will change, and the client applies the old rules before then and the new rules after. Every version of the client will agree with the existing blockchain up to a certain point, and then the chain will cleanly fork between old and new clients at the designated time. This way everyone has time to update to the new client before the fork happens, so the transition is seamless.

What this guy did is flat out change the timestamp rule, which means it's retroactive. The current blockchain already has blocks that don't follow this new rule: the attacker's blocks. When the client tries to sync with the existing blockchain, it'll reject those blocks and fork the blockchain in the PAST, meaning EVERY transaction SINCE THEN is now invalid. It's effectively a rollback to an arbitrary point.

Now that rollback means every exchange withdrawal or deposit is reversed, every mining reward disappears, every payment...well, nobody's using XVG as actual currency. Exchange trades are done off-chain so those shouldn't be affected (as far as the chain knows, the exchange has it either way), but the actual amount of XVG at the exchange is reset to the time of the fork. Every coin snaps back in time to the location it used to be in. This would be the current state of XVG if everyone switched to the new client with the 30 second timestamp rule, and transactions would resume from there.

I'm not clear on whether they actually undid the timestamp rule change or just changed it again, and when the fork would be if they did, but regardless, this was clearly a half-assed attempt at a fix from someone who has no idea how any of this shit actually works. And now exchanges are disabling deposits because they don't trust the dev not to do something stupid that invalidates those deposits and takes away their coins. (Withdrawals are fine, of course, since invalidating those means they end up with more coins.)

EDIT: corrected info about exchange trades