It does not change the center of mass, it changes where on the bike the mass acts. The weight of the rider is supported by the pegs, which are lower on the bike than the seat. So, the bike responds to side to side movement of the rider faster than if he/she was resting the posterior on the seat.
A line drawn from the tire to the peg shows a larger lateral moment arm than moving one's weight on the seat a few inches.
Re: Moki Dugway. It is amazing how a nice 'wide' dirt road, with a berm on the edge no less, becomes more intimidating the longer the drop at the edge.
Entering it at the top is mentally shocking. The paved road goes at a 90 deg angle to the edge of the rim. You approach it like you would a waterfall. At the rim it changes to dirt and makes a 90 deg turn to the left. Feels like you are headed straight out over the huge drop.
PS it didn't help that, other than my longish dirt driveway, this was only the second dirt road I'd had the NT on. It was the first dirt road my brother had ridden a motorcycle on.