This hasn't been done for a couple of years. Though under Golem and Narshe's tenure the policy was, "If past DMs had plot-locked an item, it would remain plot-locked," such locks were not put on items that did not already have it on them.Maybe this has changed, but from what I remember, the DMs DID decide that epic grandfathered gear that is no longer available on the module is to be set to Plot, and must stay on the Toon it is used with (or was granted to by a DM). This was the means by which certain old time Players wouldn't feel penalized by losing gear they once legally acquired, and as well, wouldn't allow them to twink to new Toons or give away to new Players that didn't earn it. Is this still happening?
Though, this is getting a bit off topic at this point, as the question was "is the item I want to sell an illegal item?" It is not an illegal item to possess. Whether or not it is a "legitimate" item, on the other hand, since it came as an event reward, is a purely DM call.
Gonna go ahead and lock this. If any DMs or HDMs want to chime in on the original question, feel free to unlock it and continue, but for those of you that want to continue to discuss the other aspects that were going on in the exchange, please make appropriate threads.