There are basically 3 categories here:
- Official app/addon - provided by the media provider themselves, and use/require paid-for credentials to access the services.
- Unofficial app/addon - not provided by the media provider, but still use/require paid-for credentials.
- Piracy app/addon - make the media available to anyone without requirement for paid-for credentials (either for free, or by paying a different fee to the provider of the app/addon
The first one are what you tend to get from the main app stores etc, and also occasionally as Kodi addons too (Plex for example).
The second one is what most of the Kodi addons are.
The latter ones are what end up on the
banned addons (wiki) list and are not welcome here.
We would love to have more of the first category on Kodi.
As the unofficial apps still use/require credentials, the providers are still getting their money, and so most often they turn a blind eye to them. There are occasions when cease-and-desist orders do get sent out, most commonly when the app/addon does do something which pisses off the provider such as removing ads or disabling user tracking. Some providers just like to also maintain a strict control of how their content is served up, which can also lead to C&D orders to app/addon creators.
Generally though the unofficial addons are not illegal as you're still paying the legitimate content owner for their material.
It can get to be something of a grey area though, especially for IPTV providers as it can sometimes happen that they are providing stuff that they have no legal right to serve, but will still charge their customers for that supply.
Generally though common sense should apply - if someone is offering something for a couple of dollars a month that you should be paying 10-20x that for, be wary. If the deal seems too good to be true, often that's for the simple reason that it is...