So you have updated your Pico 4 to firmware 5.6 (or newer) and all sideloaded games gives Verification failed: illegal Signature error now? Well, if you have FW still below 5.6 better keep it and do not update. But if you did, here is a guide how to solve verification error for sideloaded Pico 4 games.
The easiest method is to simply download patched games for FW 5.6 and above. More info about patched games in Pico 4 group https://t.me/pico4free
The second option is to rename the game, so verification will think it's a new different game and will never flag it.
To rename the game you will need to install Apktool to your headset.
When hit Applications, find your game.
Click quick edit and change the app and package names.
I have simply added p5 at the end of the name in this example.
Click save and when select the new modded app and install it.
If game comes with obb folder, you will need to rename the obb folder and all files inside to exactly match the new package name.
This is it. You have created a new game, which will bypass the verification check.
This works on majority Pico 4 games. Though by renaming the game you will loose any saved game progress you might had before the update. And some games will not work online after the rename. The only option is to wait for patched FW 5.6 game version, if that is the case.