does this mod still help performance if one is heavily cpu bound?
Yes, with the caveat that if you're running a bunch of mods that aren't set up to take advantage of FX Mod, then you won't see a huge improvement. Vanilla CPU load is considerably lighter, though; try firing up the FX Mod and example projects with just Vanilla and run, say, The Last Hurrah with 500 battlesize; you'll see a lot of improvement.
Why? Because, frankly, this game is (largely) not GPU-bound, except under extraordinary conditions (potentially, fillrate). So this mod addresses the root causes, which are that Vanilla uses too many generic particles where more-specific visual behaviors achieved with simple techniques can be more effective, yet perform better, and, in the case of Fighter engines, addresses that Engines are pretty CPU-hungry by design, but don't have optimizations for small-sized engines where most of the animated effects aren't really visible, etc., etc.