Type-0 translation has been shut down by SE
they released the translation in an already patched ISO format (providing game for free!), instead of patch format for the user to apply on their own legally bought games.
Also, square enix announced they would release that game officially in english, which was interfering with their legal plan to brought the game in USA/EUR, but the team rushed it to release it anyway knowing SquareEnix plans.
sometime companies announce an official release and the fan project is stopped by respect, or companies just ask the fan team to stop working on a project right before the patch release. it's hard, but it's their right, and it's too bad for all the effort and time spent by the translation team, but it's "part of the game". we have to comply.
As long as you don't provide a file or data you didn't create, it's in a grey area where the owner doesn't take action. (most of the cases).
but officially, it's illegal to translate something. subtitle of movies or TV series are illegal, translating any sentence is illegal if you don't ask the movie, book, game, art, or anything's author first.
Fan projects are "tolerated" on hacking websites as part of the "no shared data you didn't create yourself" rule. That's not legal agreement, but there's no legal action taken by companies unless officially requested with a Cease and desist letter. It happens, some translator groups already received one.
Let's hope English ni no kuni will not get one, as Spanish version didn't get one either.
I'll not answer more about fan project legality in this thread, let's keep it clean and on topic.