It's not just a folder you drop the file in.
First, you need to go to the game folder, and the folder inside of that labeled "game".
Inside, there will be an .rpa file called "scripts". You will need to decompile this file with a program called rpaExtract (Google it).
Then, there will be a folder labeled "scripts" decompiled from the .rpa file, and in that folder will be an .rpyc file labelled "script".
Open it with Renpy (The full game-maker version), and find the lines of code that match the ones in Hans' file. Replace the code in the game file with the code in Hans' file, then you will need to recompile the .rpa file using Renpy.
I did this quite a while ago, so I don't quite remember how to do the recompiling part, but I do remember it being pretty easy. Again, Google is your friend.
Then, put the modified .rpa file back in the game folder, run the game, and type in the password in Hans' post. It will work.
But again, I caution you, this is NOT worth the trouble. This mode does not make the characters nude, as I'm sure many of us hoped it did. All it does is make this image of a cartoon banana float around the screen. An obvious troll by the devs.
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Perhaps we'll get a nudity mode in the future, but this ain't it, chief.