I had never heard of these guys but, doing some google research, it looks like they have been well known as crooks going back as far as '14.
Stealing work from private modders and selling it is wrong and I'm sure illegal...but the challenge I see is most private modders lack the kind of legal resources/knowledge to do anything about it. Honestly, put yourself in the shoes of a modder who has created a nice piece of content as a passion project to share with the community and then a sim racing buddy tips you off to the fact that someone is selling it. What do you even do? Call your local police non-emergency number?!? "So...someone stole your video game? There is a link to file a stolen property report on our website...". Hiring a lawyer is probably your best bet, but remember this was a just for fun enterprise for you (at most it was a "buy me a virtual beer/coffee" nominal donation kind of thing) and now you're faced with finding a lawyer?!? And a lawyer confident/competent enough to take on a case that likely gets into matters of international law, so whatever outrageous pay rate you have in mind when I say "lawyer", go ahead and double it.
If that was all, I wouldn't be surprised if they had gotten away with it for this long and would guess they could probably continue getting away with it for a good while longer...but it sounds as though they've ripped off commercial content too, right? Forza, etc. That's the one that surprises me. If they were screwing Reiza, then maybe it would be a matter of "is this worth going after?" (from the Reiza perspective, I mean), but Microsoft? Oh man, the legal resources at their disposal...it's an economy of scale kind of thing, they go after stuff as a matter of principle (i.e. stuff that doesn't have huge ROI in terms of cost/benefit) all the time because they don't even feel it.
Maybe all this publicity ends up being the end of this little scheme.