No, it doesn't. It merely simulates it. As it should be obvious from one of the more recent patches, certain aspects of the game treat base skill and attribute values differently than magically fortified ones. Simply eliminating the 100 point limit at the executable level (or increase it to 200 or 255 if there are save game format limitations) would eliminate certain "shortcomings" of mods that try to fake a skill-cap remover.
For example, the cost of training a skill is calculated from its base value, not its fortified one. Also, the difficulty of training a skill through usage is calculated from the base skill level. That means that any mod which fakes a skill-cap remover has the problem that the learning curve for skill advancement flat-lines at 99 (or wherever the mod maintains the actual base skill level). Hypothetically speaking, improving a skill from 999 to 1000 should be ten times as hard as improving it from 99 to 100, but it isn't. As such, skills no longer reach any sort of "point of diminishing returns" because the effort to gain the next level is exactly the same as that required to gain the previous one.
Considering that Hrnchamd has already done so much in the way of adding new features, I wouldn't have suggested this idea myself, even though I think it's a valid suggestion. But while GCD may simulate a skill and attribute cap remover, to suggest that it actually DOES that isn't really true. Not to mention the fact that GCD has a lot of features that some may want, but others may not. Personally, I prefer the advancement scheme which the Bethesda developers designed... no offense intended to Galsiah. It would allow people to enjoy the benefits of a skill/attribute cap remover without needing a mod to accomplish it. Since GCD could continue to cap the skills at 99 and magically fortify them like always (unless Galsiah wants to include a patch to take advantage of a new feature), and since it changes other aspects of character development that a genuine skill/attribute cap remover would not substitute, the suggestion would neither break nor obsolete a mod which is a favorite among many members of the Morrowind community.