SPID isn't needed per se, but it's highly recommended.
It is used to change NPCs appearance.
Version 5.0.3 is recommended on SE, since 5.2.0 doesn't seem to work.
5.2+ works alright on AE.
If SPID is not installed/doesn't work, you can activate an alternate method to apply appearance to NPCs by unchecking MCM > Debug > Use SPID in Max Sick Gains.exe.
SPID works reliably 99.999% of the time, while the alternate method works 95% of the time.
If any of them fail you will see NPCs bodies using a zeroed Bodyslide (ie. they are thin as fuck) and you need to use any of the the Reset NPCs hotkeys to fix them.
Player appearance is always correctly setup and doesn't care about SPID or whatever, though.