They are perfectly legal to sell. There's just little demand and most manufacturers have discontinued sales.

I own a not-quite-that small car and the manufacturer discontinued US sales for the same reason - the lack thereof. That's why the Smart Fortwo discontinued sales in the US in 2019. The US market for good or for bad just does not want small cars. Many manufacturers are even dropping their sedans for sales reasons; e.g., Ford dropped the Fusion and Focus.