

The chat message verification is the Chat Reporting system, which can be required on servers. That’s a whole rabbit hole to go down. TL;DR you can get banned from Minecraft if your messages get reported. (Use the NoChatReports mod like everyone does)
Microsoft can revoke service for any reason, so it’s legal. Yes, this is exactly how it is done internally. The only way to bypass Mojang’s blocking is to run a “Cracked” server, where accounts are never checked, but in that system anyone can log on as any name.