Nope - not illegal or against policy. This is actually common for many FlyerTalkers. We'll use our accumulated miles/points booking award flights for family members while booking the cash ticket for ourselves so we can continue to receive the elite qualifying miles, etc.

The account owner will receive an email notifying them that their account was used to book an award ticket and that if they didn't actually book the ticket or authorize it, they should call DL or the respective airline immediately, but if the account owner is aware of the booking, the email can be ignored.