That's certainly true and they are illegally working. But maybe your image of a student might be a bit narrow? There's a large industry in Europe of language schools. You pay the school/country a few thousand euros/pounds and in return you get a student visa + basic language course. Not all, but many students are coming from pretty bad places in the hope of somehow landing a work visa(Italy and Portugal will grant citizenship if you can prove ancestry for example). The friends of my wife that told me about their lives/this practice, none of them where working for "spending money".

In portugal you need more than just "ancestry", unless it's relatively close relatives (grandparent).

You would need to speak Portuguese, and prove an effective tie to portugal, for example participating in Portuguese cultural activities, groups or organizations

I certainly needed to pay rent and buy food when I was a student?