Working for an OEM I can tell you after meetings with our attorneys and director of compliance that yes it is not legal to modify or remove any emissions device on an emissions equipped engine. There are no federal or as far as I know state laws that prohibits one from working on a deleted vehicle if that does not involve modifying or removing those emissions devices. We have had several dealers bring a deleted machine back into compliance after being deleted so it would have to be legal to perform that process.
The decision to work on a deleted vehicle is the sole discretion the dealer and we do not prohibit and I am certain we cannot stop them from doing so. We do recommend not working on deleted machines. As far as warranty that is a slippery slope. Yes a claim can be denied when submitted on a deleted machine but for a failure that is not emissions or engine related it can be a grey area.