Valve already gave Half-Life 2 away for free, and released the source code of the HL1 engine.

Is it technically illegal? Yeah, but Valve isn't losing out on any money, and there's no way they're going to risk the negative PR blowback they'd get for a takedown.

Besides, IP law is dead. The rise of AI made it pretty clear that you can steal literally anything without consequences.

This project seems perfectly congruent with current year industry standards regarding copyright, which are to move fast and lobby for permission later.

That is up for the copyright owner to enforce or not to enforce.

Until they decide, we can't know if it's illegal or not - who knows, this site might have a license.