Does this mean keyword research tools relying on adwords/google search data are violating TOS?
Not if they use the API. If they don't use the API, they violate Google's
end user terms of service, and Google reserves the right to block
that software from accessing results.
If you're a user of third party software that breaks Google's ToS to scrape data, you have no risk whatsoever other than your tool may stop working.
If, for instance, you wanted to scrape site: search results to save wading through them manually, and in the absence of any other means to get the data (this is a real example, and I do it myself) then yes, these requests are in violation of Google's ToS.
Sometimes, Google will detect that these are automated requests, and most commonly, will present a captcha that a person has to fill in, or in extreme cases, will block the computer(s) making the requests. They won't do anything about the sites involved in the site: searches, because there is no way to connect the two. I frequently look at competitor's sites, for instance, and if they were punished for my scraping disaster would ensue.
Make sure you understand the difference between the Google ToS (i.e. the rules by which you can use their search engine, or other tools) and their webmaster guidelines (rules on which sites they will or won't include in search results).
Personally, I scrape Google, and use tools that scrape Google for productivity reasons. I'm polite enough about it, and I've never run into any problems. After all, their entire business model is built on automated requests for other people's content. This has nothing to do with the performance of a site in search results, which is an entirely different matter. When Google offered a decent API to programmers, I used that, but these days there is no reasonable solution other than scraping if you want to analyse results en masse.
The mention of WebPosition Gold is a historical one. Back in the day (I should be to young to remember it, but unfortunately, I'm not) 'WPG' both scraped Google results (to check rankings) and provided automated SEO based on that advice, with a handy detectable footprint that got a lot of sites using the automated SEO advice. So it was a tool that Google really didn't like and, unusually, named. That particular software is a minnow in the sea of tools mass-querying Google these days.
