He did not say that UPX was modified; he said that The Product changed the order in which it saved its internal data so that it took better advantage of the way UPX dictionaried that data: "reordering data in a way that pleases the packer saved the day more than once".

Read up on LZW and LZX compression and you will better understand what they are talking about.

Also, if you read the specifics of The Product, they did not compress 1.9 GBs of raw data, they compressed code that generated 1.9 GBs of data.