Huh... that's actually very much the opposite of how I would interpret that sentence, but okay.
When someone asks me if I know something is illegal, to me, it seems they are being quite explicit that they are talking about legality and not morality, since otherwise they could tell me that that something is not cool, not that it's not legal. To me this is obvious, but maybe everyone else finds this strange and this is evidence that I just think weirdly, I don't know. But either way it's certainly not that I don't try to think in the first place.
Re the topic at hand. I think that people view this as at most trivially illegal. By bringing up the question, people are in some way assuming that you are against the new CA law. Not saying that you said that explicitly, but I think that is what is going on.