With all the talk about mods lately I wanted to chip in some other situations where they DO impact gameplay.
The important thing to remember is that mods do two basic things. They can change a specific model into another model. And they can change the texture of such models. An example of this in play with nude mods is that they can change the player model from the default to one with altered shapes to include nipples and male appendages. The other change is that it changes the texture of the player from being a barbie doll to a more mature theme.
So while nude mods don't affect others, I wanted to address exactly why modding can be used to actually affect others in PvP or other competitive areas.
------------------
First off, changing models isn't just limited to players. It can change models of anything in the game. A good example I've seen in other games is changing the models of PvP flags. Think you're hiding behind a wall? Not if your model is 2X bigger and your ass is poking through--revealing your location. Wondering where the healers are? Easy-peasey. They're the players with the big arrows sticking out of their heads. And while changing a model doesn't impact player collision or hit-boxes--it does significantly change how easy it is to detect hidden players or find critically important objects that may be harder to find.
Secondly, the ability to change textures can also wreak havoc on PvP (and also PVE). Imagine someone hiding in a bush wearing camouflage? Now they're neon-green. Imagine a raid boss with AoE mechanics? Now all the 'safe spots' can be displayed on the ground floor. The floor texture has been altered to be a handy-dandy guide to safety. Or, the most dangerous of all. Imagine being able to make walls invisible. Now no one can sneak behind walls or cliffs or corridors. X-ray vision. See someone naked--see them behind walls.
These are just a few examples of why graphical mods can wreak havoc on a PvP game, but not all of the possibilities. And often 'these' are the reasons why companies prohibit them as against the ToS as opposed to being prudes against nude mods.
At the moment the game is in a 'safe' spot as long as modders don't try and influence PvE content with their mods. And as long as Square-Enix never does anything super competitive with PvP. But uh. I'm so tired of people saying "oh mods are great, because they ONLY make character's naked. It's such an ignorant statement that I felt required to post this, if only to show that modding isn't 'just' about nudity.