Lawyers who make these decisions are so risk averse in my experience they'd still probably insist on it being nonmodifiable.

Sure, which is why right to repair laws are so important.

I understand this discussion as being about how society should deal with it, not how you could try to make the argument internal to a company.

Right, I'm saying I don't think codifying limitations on liability in law will be effective, because it probably wouldn't be absolute enough to satisfy the lawyers. You need a law that actually says "the user must be free to modify the device".

They don't seem to be too risk averse about misusing free software though.

Manufacturers still may not go for it, due to the potential bad publicity. To go back to the toaster example, if some fancy open source software alternative has a critical issue and causes fires, the news will not report it with nuance. "SmartCo Toaster Fires on the Rise!" will be the headline, not "Niche Modding Community Sets Toasters On Fire, And The Manufacturer Had Nothing To Do With It".