There's nothing specific against cheat codes that should make the Sephiroth battle impossible. However, depending on your cheat choices, you may make the battle more difficult. I'm assuming the one that would destroy you is Safer Sephiroth, the one-winged angel form. In addition to all of its special abilities, it also has the following two bonuses that you probably triggered in your cheat methods compared to your non-cheating methods.
- Each character at Level 99 (except Aeris) adds 30,000 max HP, 2 Attack, 20 Def, 5 Magic, and 16 MDef.
- Casting Knights of the Round on Jenova∙SYNTHESIS (who you fight just before Sephiroth) adds another 80,000 max HP.
Numbers were pulled from the Final Fantasy Wiki. The previous form of Sephiroth also gains increased HP from level 99 characters and using KotR on Jenova, but not nearly as much.
The total boost he can reach for HP alone is a factor of 5: from his normal 80,000 to 400,000. His other stats, of course, are also improved, notedly with a strong emphasis on defense. This is what makes an under-level party (and one who failed to acquire Knights of the Round) actually easier to face off against Sephiroth. I know I managed to defeat him on my first playthrough at subpar levels (Cloud only know his Meteor limit, Vincent his second, and I had Cait Sith with Dice... I don't even know what I was playing at that time).
The only other factor you may have run into is that in using cheat codes you might've slouched in better party upkeep, such as by forgetting to equip proper status defense (he has a lot of those) and buff the party consistently. Past these things, though, using cheat codes shouldn't have any direct effect.
A note should be made that the faux final battle that ensues afterwards is cited to have some interesting effects when using cheat codes, none of which cause Game Over though. It does reinforce that cheat codes themselves shouldn't have affected the previous fight.
It looks like it's a hack of sorts accomplished by editing your save file. A set of instructions to accomplish it can be found here. There were other results in Google as well searching for "unbound clan tag". All in all, it doesn't do anything for them other than changing their clan tag.
I do not know if something similar would be possible on the 360.
Best Answer
I used to LOVE playing this game!!!
I also noticed there is no mention from above of which versions the cheat codes work on (and which they dont). I only mention this because the first 'demo' version, the commercial version, and the post-expansion versions did not all have all the codes listed in the answer that was here.
I have found a reference and added the versions they work with below:
To use a cheat code, press the [enter] key, type in the code (before the -), and press enter again.
Warcraft II: Battle.net Edition
Effect: Password
Warcraft II: Beyond the Dark Portal Cheats
Effect: Password
I also remember that Angry if you continuously click on your human/orc units, they will get mad and impatient with you; but If you continuously click on the sheep, they will say 'baaa ram you' and explode!