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Is PM illegal?

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To answer the thread's title; no, Project M isn't illegal. It's unlicensed, but because it's non-profit, it's not illegal. To be unlicensed is simply to not have the direct approval of the owner, to be illegal is to be breaking a law, in this case it'd be selling a modified version of someone else's work and calling it your own; basically, commercial piracy.

The reason PM isn't at major tournaments is because TO's want to stay on Nintendo's good side and so they keep the legally gray area out of the direct eyes of Nintendo so that they can profit from the partnership deal. PM still sees a lot of play in locals up here in Canada, and I'm pretty sure in the US it's still somewhat common at local tourneys. But Smash 4 has taken it's place in big tournaments.
 
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