It prevents him from joining another English club on loan this season, yes. (Multiple posts on here over the last few days will inform you he could join a team from a country where the season follows a different calendar though!).
That's a pretty bizarre take - he made a single appearance in the league, coming on as an 85th minute substitute at Newcastle, when he was one of four development squad players on the bench as we were "down to the bare bones" (to coin a phrase).