Seems very short-sighted to say oh if you ban mod, goodbye MMO. The majority will fall in-line because you agreed to the ToS by playing the game, so you can't act like you were not doing something wrong in the first place.

They are just very quiet when it comes to bannings. The last time it was visibly clear was during the mod twitch hunt around the DSR days when YoshiP wrote that long-winded post and YouTube clears got taken down, and anyone that had modded huds and streaming were put in GM jail. This changed the streaming community as a whole, but that's not say you can't hide that stuff from OBS, or have other things on another monitor kind of ordeal. It was more of don't be reckless with mods.