How to prevent COD1.1 to run .exe files/PowerShell ... ?

[kung foo man]

This is a good question and IMO one of the key points that this community still needs to tackle.

My first thought is to edit CoD2_mp.exe and turn CreateProcessA into a no-op, but I'm not even using Windows anymore to test it.

So another thing you can do is using Linux and make a "cod2" user account that has no rights whatsoever besides playing... and you can nuke that account easily and keep it in check (also make sure to run secure Linux versions to prevent local root exploits).