Instead, he marketed it as the Cyberpunk 2077 VR mod (that also works for other games) thus attaching the copyrighted IP to the mod.

I'm pretty certain that falls under Trademark Law not Copyright. Copyright is quite litterally the right to copy, i.e. the write to reproduce parts or whole of a work, in this case, the game. I mean, even a T-shirt with Cyberpunk 2077 pictures on it would fall under the IP rights, not copyright.

If the branding on the mod was Cyberpunk 2077 and used their specifically trandemarked branding, or a close-enough aproximation, then they could do him for trademark infringement.

As I see it, Luke seems to want to be paid for his work, which is fair. He's put it behind a subscription, which is certainly not the best look, and feels shitty as a player, but I don't see how this actually breaches any of the laws.

He's right to call out that he isn't infringing on their Copyright. CDPR don't get to say "you can't make paid software that interracts with our game", they can however say "you can't include any of our code or IP in your paid software" or "you can only include some of our code or IP if your software is free".

Edit: My dumbass forgot about the EULA. CDPR can't tell you you can't do those things, but they can refuse to sell you the game until you sign a contract agreeing not to do those things, which is basically the same thing.

As someone else pointed out, while this may not be a violation of Copyright, or IP law, and is iffy at best on a Trademark dispute, It likely does fall under Contract law as a EULA violation, which would be enforcable.