No clue if it violating any Hilton policies. But, it certainly is something that should be disclosed on the website.

FYI: I specifically used the term "Hilton Corporate" because there is a difference between them and Hilton HHonors. HHonors handles marketing/loyalty and Corporate takes care of reservations and ensuring that the franchises follow the rules. This issue would be one Corporate would investigate.

If you are interested in alerting Hilton, this form is probably the easiest way to do that: https://secure.hilton.com/en/hi/feedback/index.jhtml