It is possible, because cloning API of an operating system, based on publicly available documentation, is perfectly legal.
So they are some documentations which says how AmigaOS 3.x behave in which situations? Do we have chance to find them are there opensource?
Or Morphos team make reverse-engineering to get behaviors of AmigaOS 3.x?
Also if it is in API level completable why AROS can not do same as morphos even it needs UAE in some how?
But seriously, at this point, how can it be any less "legal" than AmigaOS?
After agreement wit Amiga Inc. and Hyperion I think there is no problem for now for AmigaOS 4.x serries.