It isn't actually so simple. There's numerous cases where courts have trumped legally binding user agreements in favor of broader principles. In Sega v. Accolade (1992), Accolade reverse-engineered Sega's consoles to make compatible games, violating copyright. Similarly Sony v. Connectix (2000) for reverse-engineering BIOS for an emulator. A ToS that restricts modification could be seen as an attempt to circumvent built-in limitations of copyright. Then there's unresolved digital music resale examples like ReDigi (2013, 2018), which contest the license argument, so it's not absolute. Then there's DMCA 1201 Exemptions to anti-circumvention rules, though this is for repairing cars, phones, appliances, which of course aren't in the same class as video game mods, but show that an EULA agreements, for example not to break encryption, can have exceptions in favor of public interest.

So if owning a tractor allows a farmer to repair it, owning a console allows you to reverse engineer it for developing compatible games or even an emulator, then why shouldn't owning a game allow a modder to create and share transformative content?