well I think it was just an oversight on Josh's part.
IIP has always been coded
include "$thispath/pals/languages/languagepal.php";
So when he added in the cookie prefix it should have been
include "$thispath/pals/languages/${$config['cookieprefix']."w3t_language"}/languagepal.php";
I guess he just did a shortcut with this
include "./languages/${$config['cookieprefix']."w3t_language"}/languagepal.php";
Seems some server's do not like that who knows.