There is a problem with mod capacity, but it's not the one OP has. As was explained by Seedy, OP's problem isn't that they need to hold more than 500 unassigned mods. It's that OP has so much trash in the mod inventory that they're at capacity. I strongly doubt that OP has a stable of 500 flawless unassigned mods that are all worth keeping. In fact, I will bet that if I applied my filters to OP's unassigned mods, I'd sell 80% of them.
The problem with mod capacity is mod loadouts. We are limited to 200 with 300+ characters in the game.