Blizzard has responded to initial Addon restriction feedback with the intent to only enforce those addon restrictions during combat or active Mythic+ dungeon run, allowing for many of the addons listed below to continue to function.
This is currently the Midnight Alpha which means that things are subject to change. Blizzard is currently requesting feedback for addon changes and everything mentioned here is subject to change given feedback.
Restrictions for Addons in Instances
Blizzard has made an announcement to the UI Development community which reveals the extent of the Addon API changes. Addons will be unable to parse combat text, but when inside any instance, addons will be barred from reading chat or talking to other addons completely.
Blizzard to the UI Development Community
There are also some new rules that apply to communication while the player is in an instance. While in an instance, chat messages will be sent to Lua as Secret Values, and addons are not allowed to send communications to other players (either through addon comms or regular chat).
This means that, while addons will work, anything that requires interaction with addons will cease to work with Midnight.
Examples of Changes
This change will impact the following activities that have been common to raiders over the years:
Loot addons like RCLootCouncil will no longer work as they do right now.
This means clicking "BiS", "Offspec", "Transmog", when a piece of loot drops, so your loot master decides its fate won't work anymore.
You can no longer share raid notes with addons like MethodRaidTools while inside a raid.
You can still import notes from text and use them; the only thing breaking is the ability to share them with your raid.
No more Break Timers
This applies to any timers that aren't pull timers, as those are baked in Blizzard's code since BFA. Blizzard's code only supports Pull Timers.
Addons that rely on reading chat, like gold gambling addons, will completely stop working.
With addons no longer able to read chat messages, these addons can no longer see rolls in chat.
Readycheck addons that check for durability or latency won't have that information anymore.
While buffs on players are visible while out of combat, checks for durability and latency use community-maintained libraries, which will cease to function with these changes.
MysticalOS, the author of the addon DBM, published a video explaining the technical side of those changes recently:
Range of Changes
Note that while we've been talking about raids, these changes apply to any zone WoW considers as instance. This means: raids, dungeons, delves, arenas, and battlegrounds. While Player Housing is considered an instance, it seems like it is part of an exception list which allows addons to work normally there, so Housing is not affected.
The Future of Addons in Raids in Midnight
While the changes may lead people to think otherwise, there will still be room for addons in raids during Midnight.
Customizations
During the same announcement to developers, Blizzard unveiled its plan for addons to take on a more stylistic role in combat. This means giving authors ways to customize how the information provided by Blizzard's tools is displayed. This process will prevent addons from actually performing any logic with the information, only allowing for changes like changing colors, sizes, etc.
Addon Arms Race
These changes likely mean the end of any addon-assisted combat warnings with Midnight, leaving that task exclusively to Blizzard's own systems. Other MMOs like FFXIV have similar addon restrictions in combat, which has led to the proliferation of external tools to assist in difficult encounters, which is not something far-fetched to imagine could happen in WoW if Blizzard's solution is subpar.
