What happens if the developers don't like the mod?

Software that is well-maintained should make its decisions based upon the consensus of the users.

Also then how would players pick and choose which mods to use?

If having such a choice would benefit the game (determined by the consensus of the users), it could be implemented as an optional thing.

a lot of mods would very much not fit in the main game

Then in that case, they fill a niche distinct from the original game, and would be perfect for a fork.