This is a gem that checks the strength of a user-submitted password. It has a large number of downloads (37,000 on the legitimate 0.0.6 version). It looks like it's made to be integrated on webservers. The modified gem downloaded and executed code stored in a editable Pastebin, meaning that the code could have changed at any time. Presumably, the malicious code would activate just by browsing any page on the affected…
To add a bit of a sense of scale here, the popular Devise gem that's used for authentication in many Rails apps has 52.7 million total downloads and almost 20k stars on GitHub. strong_password has 247k total downloads and 191 stars. It has three reverse dependencies, none of which I've ever heard of and none of which have any of their own reverse dependencies.
This suggests to me that this gem is used by less than 1% of Ruby web apps (probably substantially less) and, more importantly, if you have a dependency on this gem you probably know (because it'd be a direct dependency in your Gemfile, not a dependency of a dependency).