What is the point of "no mods" if it is not enforced?

[Pintsized]

One of the reasons I chose to play this game is based on an idea that this game does not allow mods or third party programs, but, from what I am reading and hearing, damage meters, parsers, and even screen overlays are widely used by most players in the end game without penalty.

If you're referring to this part:

"Third-Party Programs or Tools. SQUARE ENIX strictly prohibits the use of third-party programs or tools – including programs and tools that permit automated or “absentee” play – in FINAL FANTASY XIV. Accordingly, the following activities are prohibited:

· Modifying, analyzing, integrating, and/or reverse engineering game software or data.
· Creating, distributing, using, or promoting utilities that interact with the game.
· Exploiting SQUARE ENIX programming bugs or glitches.
· Automating gameplay processes."

I think you misunderstand what 'analyzing' means in this context, clearly SE don't think parsers 'analyze' anything in breach of this clause.

[Niwashi]

clearly SE don't think parsers 'analyze' anything in breach of this clause.

It's not that they aren't in breach of that clause. The most popular ones are (because of how they integrate themselves into the game's client software). But SE has acknowledged the fact that they can only enforce the rule when they know about violations, and the only way they have access to that information is if you discuss it in chat. (Plus you'd usually need to be reported to the GMs for it before they'd see the violation, since just because they have access to chat logs doesn't mean they read it all.) The result is that it's a rule people can get away with breaking so long as they don't harass anyone enough to be reported for it.

(The only parsers that aren't against the rules are ones that rely on you dumping the combat log to a text file and then running the parser separately after the fact and loading that text file into it as input. Those ones don't integrate into the client software or intercept communication between the servers and client, so they aren't breaking any rules. But they don't give their numbers in real time either, which is why the rule-breaking ones are more popular.)