Ok, upon further thought here’s two options:
1. Make the DP penalty apply to all extra s-mods, regardless of source. This would affect both player and NPC fleets.
2. Make the DP penalty apply only to extra s-mods explicitly added in the build-in interface of this mod. This would also remove the penalty from NPC fleets.
For the sake of consistency, I don’t want separate behavior for player and NPC fleets. Let me know if you have any strong feelings in either direction.
My vote is for option 2. I like the penalty for going "over the limit" within the mod's structure (i.e., buying S-Mods with xp), but reserving the special nature of extra S-Mods gained via other means. I feel those are edge cases and should retain their rewarding nature without being penalized.
The UI to add/remove is clunky. I don't know which ships qualify when choosing my ship, I can only check one ship at a time, the ship selector popup is not showing any relevant qualifying info on hover.. I have to dig through layers of text to check everything. It's costing me a lot of clicks in a secondary menu to get the job done.
It is clunky. Wishlist would be the mini fleet screen it already does with a hover tooltip for each ship displaying current xp, then each mod on the ship with xp cost to upgrade, with color coding (red or grey text for can't build in, green if you can, for example). How reasonable any of that is, I have no idea. It's just a wish list.
Also, I often enjoy pimping out a larger cargo ship with built in insulated engines or other mods. Not really going to happen here as my cargo vessels never see combat. That's a pretty big hit, unless I am missing something.
Mentioned before, but for completeness, civilian/unarmed ships get xp. I wind up with some seriously tricked out logistics vessels in my playthroughs using this mod.
Also would have been nice to remove the mod without crashing the save. I'm now being held hostage in one of my runs. 
You can leave it in and not use it without much fuss. If I recall you can still use story points to build in mods on the refit screen like normal. Might be wrong there, though; haven't checked and I'm not near my computer.
Anyway, if you could somehow move the UI to the ship loadout screen, maybe give alerts when a specific ship qualifies for an S-Mod they have installed.. dunno. Could be improved bigly.
Alerts would be convenient. Starship Legends adds alerts to the "Important" tab of the Intel screen when a ship can swap reputation traits. It's pretty nice. Having the same with getting enough to build in an S-Mod would be nice, though you'd likely get alert spam if you swapped the mods on a ship with enough xp on it.
Adding it to the refit screen would be neutral for me. I like it fine as an additional section on stations instead of being able to do it anywhere, any time.
