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The legality was only ever a grey area. Their days may be numbered, however. During the lockdowns they removed the one physical copy per digital copy lent, and as a result of that they got sued. Instead of settling out of court they drummed up donations to a legal fund and lost hard, and during the trial a judge ruled that their practice was illegal. In my opinion, they should have done everything they could have to settle out of court, rather than try and build a frivilous defense that had no grounding in law.
Right now, they're appealing it, so I guess that's why it's still up. However it looks like their strategy isn't any better now than it was then.
But hey, their laywer's getting paid.