This should be illegal. I can understand raising the rates on existing paid plans automatically, if nothing else it's eventually reasonable for inflation purposes, but auto-converting from free to paid? No.
I suspect (IANAL) that in a sense, it already is, in that anybody testing this in court would deny the existence of any form of contract acceptance, and that would be the end of it.
It's probably legal to send messages like this, just like it's legal for ski slopes to have "We aren't at fault for anything" statements on every ticket. It's when they tried to enforce it that they'd find the law wasn't on their side.
It should be illegal to make claims that you know are not legally valid.
Of course this would be a horrible rule to enforce between the "the contract changes weren't run by legal" and "that line is enforceable in this outher jurisdiction that we operate in". But scaring average consumers with a massive contract and a line at the end "even if part of this contract is unenforceable the remaining clauses apply" is just abuse of people who don't have the legal power to actually test if the claims are valid and get screwed over.
Very often with contract law there is mostly no such thing as 'knowing a claim is not legally valid'. A lot of contract law is established by precedent, meaning in those cases nobody including the judge knew the enforceability of the issue before the judgement was written. Cases are also rarely identical examples of previous cases, meaning there can be an element of precedent setting even in cases that seem routine.
I don't think it should be illegal to have unenforceable clauses. Just ones that are known to be unenforceable. For example look at your average ISP out TV provider contract and there are a handful of these designed to prey on the public that doesn't know better.
It would definitely be difficult and messy to enforce, quite likely to messy to be feasible, but I would like to see some rule like this passed.
I don't think it matters if it's legal. If they succeed in charging anyone, most people will respond with chargebacks, which their bank will likely support, in this case.
The only case I can see them getting money is if someone actually is using FogBugz, and is willing to pay, in which case it's fine.
I would go further and say most people get away with bullshit, which is why human civilization finds itself slowing circling the drain like a turd in the toilet.
