Just like those idiotic region codes of DVD’s and Blu Ray’s.
Non compliant devices, an old (HDMI) TV for example, will simply display a message that the content cannot be displayed written with illegal copying, ripping or to promote piracy.
The video quality may however be of a lower quality (Component Video is recommended – see also “Connect your PC to TV“) as well.
Some devices, like a Play Station 4 console, offer the option to disable HDCP.
The video sources asks for the secret code from the destination device, before it sends content, so the receiving party is authorized and can decrypt.
Another observation, by others, only with some other splitters, has been that only one of the two connect HDMI devices has to be HDCP compliant so that one of the connected devices already authenticates and “opens” by accident the digital video stream for the other output.
Manufacturers change hardware all the time, so this “feature” might not work with newer models or revisions!
HDMI 1.4 (and newer) devices will most likely not work!
See it as the digital counter part of Macro Vision as was used with analog video way back in the day.
HDCP uses authorization and encryption – it verifies (authenticate) the receiving party (Destination or “input”) – i.e.
Note that quite a lot of devices, like the XBox One, XBox 360 and for example the Amazon Fire TV, dynamically set HDCP on their HDMI ports.