GM didn't understand what you were asking, or else didn't understand what the TOS says:
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D. modify or cause to be modified any files that are a part of the Game Client or the Service in any way not expressly authorized by Blizzard;
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of course, modifying the files is against the rules, but adding other files to the locations that are checked by the client expressly for the purpose of allowing you to override the default ones is fine. You're not modifying anything that the game doesn't allow you to.
This phrase in particular --
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the Blizzard default UI elements,
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-- is really indicative of a GM that doesn't understand what they're saying, because addons are entirely about modifying the default UI, and obviously they're fine.