What is this StandardFirmata_ModifiedAll code doing?

Hmm, could you explain explicitly what you mean with dumb device?

I mean that with the Firmata sketch uploaded, the functionality of the Arduino is fixed. It is limited by what the program on the other end tells it to do (read a digital pin, write to a digital pin, read an analog pin, etc.).

It can not also, for instance, run a web server or do timer related things or respond to external interrupts.

what do you mean that the arduino can not do timer related things?
I really need to use interrupt, any idea to use interrupt in Firmata Sketch?
why is it so?