Example (read pls):

It's a sword mod and your swinging some swords and the modder can put in some whooshes and knife scratches to add some more pump to the action. It would be great for sharing replays. Same with hit sounds when a player gets hit it can say some random shit the modder decides to put in. (Imagine that in Japanese lel). Or as another example, you're running from a huge building about to collapse and when you play back the replay you hear rocks and things tumbling down. If you don't want to hear these sounds you could take the common sense way and turn down Sfx in settings or there could be a command like /opt modsfx "0".

Each sound can last as long as a kiai is

imo this would be a really cool feature to have in the game

When making a mod it could say like "on hit sound - upload" and etc

Also with the blood it could have some custom splatter sound or something!

There is so many things you would be able to do but the downside is mod files would be bigger depending on the Sfx the modder used.