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It's not illegal. The Blizzard API allows you to perform certain actions based on events (though it's already limited, for example, pallypower can't smart-cast while in combat).
As a general rule of thumb, anything that you can do with addons is allowed, except when it allows for cross-faction communication (or otherwise breaks the rules, such as generating spam, etc).
When Blizzard doesn't want it to be possible for an addon to do something, they simply change the API so it won't work anymore.
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