It's not illegal in the sense that it will land you in jail.

Void warranty because when ppl root their phones, they do crazy things with it. Doing these crazy things without fully understanding it will sometimes result in a spoilt phone that cannot be repaired by means available to the user. The term for this kind of situation is that the phone is 'bricked'.

Under the warranty agreement, usually there's a clause that says the warranty is void if some form of modification has been performed. Imagine you're a manufacturer, and ppl keep returning these phone cause they do something that they're not supposed to do. Will you repair it? It will cost money to repair these phones one you know.