I think this illustrates an issue in common law systems in general. Contrary to what we’re taught in school about how actions are generally legal by default, and only illegal if a law has been passed to prohibit them, in reality, actions exist in a superposition of legal and illegal until someone challenges that position and a court finds out (subject to any appeals). You can only evaluate in practice whether something is legal based on copying others in similar situations. The further you get from the known outcomes the fuzzier this all becomes.
This tends to be something people encounter a lot around tax, complex business structures, and various international dealings where you’re more likely to end up in an edge case that hasn’t been well explored.
And it's worth emphasizing that this is a good thing.
Civil law systems (which are used in the non-English-speaking parts of Europe for example) don't have this property. In such systems, court precedents don't really exist, so if something isn't clearly defined by law, and there's no extremely ubiquitous legal interpretation that everybody seems to follow, you don't know whether it's legal or not.
For example, the Polish tax authority lets you ask for a tax interpretation for cases that aren't legally obvious, something that I believe the US would have handled via the court precedent system. It's not unusual for two people in identical situations to receive opposite rulings, and Those rulings are not binding on the authority that issued them.
In other words, you don't know how to handle your tax situation, you ask your tax authority, they tell you "hey, we're the tax authority, we're telling you to do x", you do x, they audit you, they say "this isn't clearly defined in law, we now believe you should have done y instead, here's your orange jumpsuit."
Individual tax interpretations are not binding (in the way that they don't alter the law, and they might be rescinded at any time), but they grant immunity from prosecution (art. 14k of tax law).
And eventual orange jumpsuit would be decided by the court, not tax authority.
This tends to be something people encounter a lot around tax, complex business structures, and various international dealings where you’re more likely to end up in an edge case that hasn’t been well explored.