Whats illegal about it? The one vague Texas law that was in the original C&D? Everything else was just TOS violation.
If you have entered into the contract and are even party to it in the first place, which is not clear in this case and is likely going to be one of the questions litigated here.
Sort of. Depends on the jurisdiction, and it's not always the case. That's why this is likely to be one of the core topics litigated in this case.
Nobody on HN is going to know the answer here at this point.