City was hit with the punishment in February, following an investigation sparked by the Football Leaks revelations of November 2018, with European football's governing body finding the then Premier League champions to have breached FFP rules.
But on Monday, CAS announced City did not disguise equity funding as sponsorship contributions and stated the allegations brought by UEFA were either "not established" or "time-barred" under the organisation's own regulations.
City was fined €10million – down from €30m – for failing to co-operate with UEFA's investigation, but for a club of their wealth that has been seen as a slap on the wrist compared to the initial sanction.
Mourinho and Liverpool manager Jurgen Klopp criticised the decision to overturn City's ban, while the Tottenham boss urged UEFA to scrap FFP, likening its issues to the inconsistencies prevalent with VAR technology.
"My opinion changed because of the decisions that are made," he told reporters when asked if his feelings towards FFP had altered since his days in charge of a free-spending Chelsea. "Consistency is very important for me.
"I cannot understand a penalty that I saw in Juventus-Atalanta, the handball where [Atalanta coach Gian Piero] Gasperini says he only has one alternative, to cut his players' hands. Then the next day, you have other matches where it is not a penalty.
"I like consistency, clarity. I don't like doubts. I like that when a club buys a player or swaps a player. I don't like when I buy a player for £10million, then two weeks later the seller comes to my club with £10m plus one pound. Everyone knows what is going on.
"This is what disturbs me. It's like VAR, my opinion doesn't change. When a few years ago I said I like the concept - I like the concept.
"What I don't like is the interpretation of it. When I say I think FFP should finish, it's not because I don't agree with the basic principals of the FFP, it's because I don't agree with the circus. So let's open the door of the circus, let people enjoy, come in and go out, stay for the clown show. Let people enjoy freely."
But Mourinho did highlight that football without financial regulation will open the door to owners being without reproach, using the example of Newcastle United, who are reportedly the subject of a takeover bid by a Saudi Arabian-led consortium.
"I don't understand the process, I don't know what is going on. I said a club like Newcastle, without FFP, the owner will be free to do what he wants. Without hiding," he said.