No clear definition at the end. There have been many illegal items created over the years and while some were removed many remained. Whether or not this continues no one knows. However, if illegal items that interferes with the game mechanics will definitely be removed when sighted.
But thank you for the topic so I can take this opportunity for a quick lesson:
1. If we go way back, Seers had the power to create. There are no good databases other than Woody's that still have some of them listed.
2. IGMs can create and not sure their items ever been properly recorded so they could be circulating all over the places.
3. Senior GMs, I am not too sure but they may have the ability to change code on existing items then grabbed by players.
4. EMs could create, different seniority were given more power to create and dye. So many renegade items existed these past 15+ years. But as they are caught, they are fired which is probably why Mesanna have gone through 75+ EMs hehe. EMs also had problems locking down items properly early days so people just grabbed them off the ground
. Many EMs went into this program wanting to profit so they found ways.
5. Exploited items through a bug. There are still many of these items out there.
6. Duped items through bugs. I would say thousands of these items still exists.
Now you understand why it's hard to say what item is "illegal"