This plug-in is supposed to block all third-party recipes that attempt to use custom items as ingredients (to avoid cases where third-party recipes expect a diamond hoe and accidentally accept a custom item). But, it should allow third-party recipes to use custom items as results (no confusion is possible because the custom item result must have been chosen explicitly).

But... it seems like custom item results are blocked as well...

This will be fixed in Custom Items 9.8