So from what I hear, people are using the character moveset mods online against actual people which officially violates a conduct.
Usually mods are within the realms of things done by the consumer which is pretty much free to use as long as it doesn't ruin another player experience with X/Y said game. Mods that generally alter scenery, character looks/skins, costume mods/scheme color swap, etc. are pretty ok according to Murray since it's just personalized experience that doesn't affect actual gameplay.
Apparently Harada wrote that if these types of character moveset mods continue to be played online without Namco's approval and balance scan behind it, actions from Namco would be made I hear.