Patching in new DRM years after launch seems unlikely to impact pirates, but actively harms legitimate users who play on Steam Deck or mod games they paid for.
All this because Capcom heard that a Street Fighter tournament participant was using a nude mod for Chun-Li. Just blacklist him and move on, let me keep my flashlight lasers on dropped materials in MH:W please.
I imagine it's about prevention rather than discipline in their eyes. I'm not defending the idea (who cares if we see chun li naked? There is much worse on the internet) but I don't think blacklisting the player would assuage their fears of it happening in the future.