As far as I know there is no issue with legality. I don’t remember the specifics at this point. I believe the psobb setup was a free download for the client and what they did was rewrote the server side so it was their own software. As far as the IP art, music, etc. IDK 100%.

I will say it has been going for nearly 15 years and widely publicized and sega hasn’t ever tried to do anything to shut it down. I believe it’s in some kind of loop hole where running the server is legal, and using the client is legal for PSO:BB, but for v1, v2, and I & II version you would still need to have a legit copy for maximum legality. So if you just want to play the game… PSO:BB using their modified client / server setup is a good way to do it… plus it looks nice in HD. There are other servers besides schthack, that’s just the one I used way back in the day and they’re still around.