Without LLMs, reverse engineering isn't illegal is it? Companies probably have departments of people that reverse engineer other companies products, software and hardware, to look for patent infringement, how a competitor is doing things, etc. Using that reverse engineered code or physical designs in your product and producing it I think is the illegal part.

Some of the reverse engineering being done by LLMs is using older OSS. I remember hearing about some 2012 era reverse engineering app that looks at the assembly language and reconstructs software. The LLM isn't reverse engineering itself in those scenarios, its calling local software, interpreting results, probably glueing software together with what the human is prompting it to do.