It is legally grey considering Blizzard themselves released the source code. Asking for money, however, is illegal. Even in form of a paywall through donations. Donate paywalls are a legally grey area that has never been argued in court. Blizzard says in their ToS but again that isn't law, it is a contractual agreement, but you never actually sign it. Depends on the judge you ask, some will tell you that you have to physically sign it, some will tell you that by clicking accept you agree to it. Problem is, locking something behind an agreement like this, and then releasing the source code. That is why actual servers get taken down but the repacks themselves are never messed with by Blizz. They don't care if you and a few friends play, but they will protect their IP if you get large enough as a server owner. Blizz by their grace allows us to play around with stuff. This ensures that the game will outlive the paid version for those of us who love WoW and they know this. They know that we love the game more than they do, for them it's about making money, for us it's a passion, so they let us have our cake as long as we don't disrupt their income, hence why I pay my sub fee while playing with repacks.