Wahoo, i'm not the only one who like to stick my hands in the bee hive

what makes a mod illegal then ?
Not so long into simracing myself but started to read into that a bit and that whole topic is a bit confusing.
It seems like some mods are deemed illegal because someone converted it from game a to game b without the permission of the mod creator.
But then whom did those Mod creators ask in the first place. I doubt it e.g. that the legal CDTP2005 mod creator asked the FIA permission to create those liveries e.g., so according to my logic it "should" be illegal from the beginning.
Same with P&G, did anyone ask Graham Hill or Sterling Moss for permissions to create that mod and use their cars ?
I don't want to point any fingers, I am merely really confused of the legal situation tbh and would like to know how that works. 
Let me explain the sim racing lingo. an illegal mod is a mod that has been converted from one platform to another platform without the original authors permission. This is also true is one misrepresents the work of another as his own work. does this sound familiar from writing term papers?
the correct term for this is plagiarism, but because that is a difficult word to spell we use the term illegal (at least i assume thats the case

) although you are correct in stating that it is illegal to infringe on others copywrite, what we find in practice is that most do not mind as long as no profit is made. there have been very few cases otherwise (british touring cars and A1 GP to name the only 2 i know of). Many more (upon finding out about a mod of their series or track in progress) have not only allowed it to continue, but have gone out of their way to assist the mod makers, including access to data and cars. They see the potential of free publicity for their series or track as a positive.
as to the use of cars in a mod and paint jobs, usually the copywrite holder is the sanctioning body or manufacturer and not the owner of the car, therefore the owners of the cars have no recourse.