Modding is a legal grey area, technically it counts as copyright infringement
but companies have been willing to turn a blind eye to it due to the fact people were doing it as a hobby without any money exchanging hands. Now that "paying for mods" is becoming the norm, companies have more of an incentive to step in and start throwing around their legal weight, which is something that has been happening within the last year or so as seen with
Take-Two/
Nintendo/
Crytek/etc.
The "Spirit of Modding" is basically an agreement between game companies & modders that as long as money isn't involved, they will keep their distance.
I would like to point out that I have been modding games since around 05-06, Paid mods were always considered taboo. Unfortunately with this newer generation and the rise of stuff like Patreon, that taboo has been more or less broken.