Page 56 (or page 13, it says both on the page) of my Multi-site Public Offering Statement (not the Bay Lake specific one) dated 9/2008:
"When a Club Member uses his or her Home Resort Vacation Points to reserve Vacation Homes on behalf of a non-Club Member, and the Club Member does not charge any rental or other fees to the non-Club Member for the reservation, the non-Club Member is eligible for all or some of the Club Member privileges and benefits that a Club Member would normally receive during his or her stay in the reserved Vacation Home. If the non-Club member is renting, it is the responsibility of the Member to notify Member Services when making the reservation. Member privileges and benefits cannot be extended to non-Club Members who rent Vacation Homes from Club Members."
It is so completely obvious from that that renting is NOT illegal, since they have rules about what benefits renters can get.
Page 69 (and 7):
No rental assistance is being offered to you by....or any affiliate or subsidiary of TWDC. This means that if you wish to rent your Ownership Interest, you must rent your occupancy rights solely through your own efforts. As stated above, The TWDC Companies, including, without limitation, DVC, will be in competition with you for renters, and DVD will place its own inventory of Ownership Interests into a rental program of its own. All renters and exchangers must comply with the rules and regulations affecting occupancy of Vacation Homes, and the renting Owners will be responsible for the acts or omissions of their renters or any other person or persons permitted by the Owners to use a reserved Vacation Home."
So they've made sure to make rules about renting...there aren't rules about illegal things, other than "that's illegal, you can't do it and you'll be in trouble if you do".