At this point will FFXIV collapse if all mods and third party tools disappear?

[Absurdity]

While people may leave the big question is where would they go? Most people who leave because of that would end up coming back at the moment because there's no real competition for FFXIV.

No real competition is debatable, there is absolutely competition or even a superior option out there depending on what your focus is.

For raiders it's rather simple, they'll just go back to WoW, they're probably raiding in both games already anyway.

For the people sitting in Limsa all day on the other hand there are always other options because what you seem to miss is that these people aren't playing XIV for it's amazing (lmao) gameplay or strong (lmao²) mmo elements.
They would just go to a different game that is essentially an online chat room with decent graphics and visual customization, because that's essentially all they're engaging with anyway.

If it needed to be solved, the time to solve it was 4 years ago. It's far, far too late now.

Especially since that side of the game has really only exploded in Shadowbringers.