Loki is nothing more than an installer to install the recovery. Traditional phones you can create a .zip file to flash from recovery to recovery. Since Verizon is Verizon they have some special software sitting in some partition to track this type of behavior when you flash a recovery. I tried creating a flashable recovery in a zip format and got the "your phone has installed some illegal blah blah please contact Verizon to reload your phone" and it wouldn't go past that. The only thing that that worked was the bootloader. I simply had to use Odin to flash the stock ROM and then root again. More info about the Loki installer is here
I checked out the script and it basically flashes the recovery.img like most phones but it needs to sneak it in past Verizon crap using su.