Because a few years ago someone used a nude mod of Chun Li and forgot to remove it before playing at a major Esports tournament, and ended up broadcasted live all over. And I think there was a similar incident like a decade ago where the same thing happened, but I can't recall more details.

So the "horny" side of the fanbase finally threatened the "major business" side, and in doing so many of the big FGC companies started to panic to save face. Whether it was by making stricter rules, killing mods all over, or simply fucking up the characters so no one would want to jerk off to them.