I understood that, and I used a Cobra for years, but in this case you are really talking about two different things.
1. Violating the MOD as you described earlier is risking CNS oxygen toxicity, which brings on a seizure and almost certain drowning.
2. When people are talking about the CNS clock that is being checked by a graph on your Cobra, they are talking about total oxygen exposure over time, what some people measure via OTUs (Oxygen Toxicity Units). The danger in this case is pulmonary oxygen toxicity, essentially an irritation of the lung. Back when I took the PADI nitrox course, that was a big part of the class, and we were given a special table to help us keep track of it. When you took the class, that was barely mentioned, which is why you are probably confused. The reason it is barely mentioned today is that it is pretty darn hard to get near those limits on a day of multiple recreational dives. It really isn't going to happen, and if it does, it isn't life-threatening. You can ride your Cobra this way if you want, but it won't be all that exciting--you won't get anywhere near the limits.
(Edit. Deleted my previous comments)
Quote from the Suunto Cobra manual:
3.4.3. OXYGEN LIMIT FRACTION (OLF)
In addition to tracking the diver’s exposure to nitrogen,
the instrument tracks the exposure to oxygen, if set to
Nitrox mode. These calculations are treated as entirely
separate functions.
The dive computer calculates separately for Central
Nervous System oxygen toxicity (CNS) and Pulmonary
Oxygen toxicity, the latter measured by the addition of
Oxygen Toxicity Units (OTU). Both fractions are scaled
so that the maximum tolerated exposure for each is
expressed as 100%.
The Oxygen Limit Fraction (OLF) has 11 segments, each
representing 10%. The OLF bar graph displays only the
value of the higher of the two calculations. When the
OTU value meets and exceeds the CNS value then in
addition to displaying its percentage the lowest segment
blinks to indicate that the value shown relates to OTU.
The oxygen toxicity calculations are based on the factors
listed in section 6.3. “Oxygen Exposure”.
End quote.
From http://www.aqualung.com/technical_library/cobra_manual_en_2e285.pdf
My take of this is that the computer display monitors both so providing you stay below the limits you are okay. Interested to know how many people dive in this way and if it is generally considered safe.