So if it's "legal" does that mean if someone buys a mod account they get to keep their 'mod'?
No, mod status would be removed if a mod sold an account.
Glad there's a disincentive there...What are the incentives for our mods not to sell?
Not sure what you mean, that's not really a disincentive. If a mod sells his account, he's effectively already removed himself as a mod.