Most Japanese developers don't care about modding I think. That's why doujin creators thriving in Japan, they can even sell their works, despite a big chunk of them are parodies with the additional hentai content.
Same goes with fan translation communities, which basically always in the "grey" area of law since translating a game can also be considered "modifying" it. Take example of a VN called "Summer Pockets" by Key, one of the main player in the Japanese VN industry. Being a huge company with many branches, child companies and imprints, they should be able to take down any project that can potentially harm them in any way with relative ease. Now back in 2018, a group of fans starting to unofficially translate Summer Pockets. In August this year, Key announced that they will officially localize the VN themselves. But here is the strange thing - until this day the fan translation project is still going strong , with no DCMA, C&D letter or any takedown notice! Obviously, if the fan translation patch get finished and released earlier than the official version, Key will lose a good portion of their sales. Then why would they do nothing to stop the fan project? I don't know the answer myself.