Would it violate the TOS to install a third party hard drive?
Done all the time. Apple does not make drives, so really all drives are non-Apple hardware.

The TOS restriction is targeted at complete clones - main board, case etc.

Various Apple models over the years have considered the drives to be user-replaceable - they just slide out without any tools. The pre-cylinder Mac Pro and XServes are good examples. Various laptop models made the drive very easy to change - one screw and it pops right out.