Mod's are totally fine honestly, so long as it's a mod. If it's just added files and folders added into the existing Steam directory of the game, you launch the official game, and your mod executes overtop - there's no issue. The only "issue" may arise solely on popularity and marketing. If there's any confusion weather or not it's a official or not, that's when there's an issue. So my advice to modders is to use the word "Mod" and "Unofficial" and/or "Fan Content". as much as possible to separate any confusion between official content and fan content.
my other advice is to basically put yourselfs in the shoes of a creator. (not YOU but anyone who is a fan game dev, or modder, etc). pretend you made something, by yourself, you own it, it's your characters, story, art, everything, was yours. and someone else came along and started using all of that and making their own version of it. if you do that, you might start to see that aside from legalities, you may want to tread lightly and respect the creators work as much as possible. this is why we made a very clear cut fan content policy.