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This new "password-less migration" is specifically for use with the soon to be introduced Oracle VM Manager for LDoms, which expects a certain behavior from the underlying virtualization implementation, in this case, it provides behavior in LDoms that is similar to what is available for Xen.
Specifically, the XML/XMPP handshake between ldmd running on the source and target machines is modified, so that early on, in the handshake exchange, the LDoms manager on the target host checks an SMF property to see if un-autheticated migrations are allowed. If they are, it sets an extra "mechanism" property in one of the handshake response which the source ldmd can read and know it can send an XML doc without a password and the migration will be accepted.
This change is only in the XML/XMPP interface, and has no impact on the CLI, which still requires a password.
hope this helps.