I don't think the staff is qualified to say if it's legal. But it's cool!
Well, I guess that might be true but for me, their opinions are the only ones I care about. This whole thing is way too small scale for anyone to take notice or care. The Papers, Please shirts ended up costing just around $1k to manufacture and I sold em all at cost. I made a little scratch from duders giving me small tips which I super appreciated but if I broke those tips down against the time it took me to do all that plus hump all the shirts around PAX (not to mention my typical rates for designs/art) it doesn't amount to nearly what you'd have to pay me to do it for something I didn't care about =]
Oh, the fact that this is happening is super cool. I like the fact that their approach is "seems awesome, do it."
Like when they were asked about suing Gamebomb.ru.