I'm one of the mod developers for the VRCMG (VRChat Modding Group) and I want to shed some light into this situation.
Modding has always been against the Terms of Service of VRChat but they kind off let it slide if you weren't being a dick about it. Over the past 2 years the game has grown a lot thanks to the lockdowns and affordable headsets. With that the modding community also grew a ton. Mods from the VRCMG were always about fixing problems in the game, introducing Quality of Life improvements, adding new features that just aren't/weren't in the game yet and most importantly fix security vulnerabilities like specific avatar crashers or network based crashers/laggers.
The VRCMG has always been about open-source accessible and safe-to-use mods. Every mod there is inspected by trusted members of the team to make sure that no malicious or harmful code makes it out into the public. And this has been working for the past 2 years.
There is a minority of people that use modding just to be toxic nuisances that want to ruin others people experience in VRChat for reasons unknown. They will buy closed-source obfuscated mods that contain malicious/toxic features.
Usually those mods also contain code from the VRCMG without disclosing that they are, but that's another story.
VRChat obviously wants to combat that minority, but this isn't the way to do it. They've been ignoring year old issues that have been fixed by mods for a while.
And with EAC in place those mods won't be usable anymore. We have no intent of playing the cat-and-mouse game because it just doesn't make sense.
Malicious mods will continue to exist, because they are closed source and they have the funds to buy bypasses for EAC because they make a profit off of the mods they made.
So everyone will lose their QoL features and their protection against crashers while malicious users (even without mods by just using crasher avatars) continue to roam public instances.
Whoever has made that decision at VRChat seems to be so out of touch with the community, that they don't understand how big the modding community is and that they need them.