Simply:
1. Yes, it's legal.
2. It doesn't count against house storage (though there is a limit of the number of vendors you can have).
3. The book and the first 4 BODs count as one item, and a book can have as many as 500 BODs. So you can have a book with 499 BODs, and another with 124 BODs, counting as a total of 100+25 = 125 items on a single vendor (623 total BODs). Each additional book will reduce that total number of BODs by one, and that's assuming you keep the books with a total that ends in 9 or 4 for every single BOD. So, for a 5-book example, you can have 620 BODs, or 5 books with 104 BODs each in them (and be able to move the BODs between them in multiples of 5 and stay at the same capacity).
4. The Books themselves have to be Not For Sale. However, you are free to price, or not price, any of the BODs inside the book before putting them on the vendor. The vendor doesn't care one way or the other.
