Down the chats of the official Fanlore discord server lately (of which I have been in for the past few months), they've been discussing this kind of transgression alongside the HP fanfic debacle (specifically, the Manacled one, of which upon its reworked professional release by its fanfic author gained enough controversy within and outside the fandom that it warranted for a wiki article on its own).

Also, one editor has suggested using "illegal fic binding" in place of the term "illegal "fanbinding" as the latter connotes the non-profit work with a for-profit tone in a negative way. Another has noted that het (in other words, F/M) fanfics sell much more than other pairing-centered ones, and attract more outsiders willing to buy that much for an illegal fic-binded copy, in disrespect to those original authors; throw the franchise copyright shenanigans in, and there we have the entire panfandom world at a crossroads battlefield against those recklessly profiteering for the sake of it.

Also, as a side note, there's also this recently-created wiki article section about said fannish controversy:
https://fanlore.org/wiki/Fannish_Bookbinding#Criticism_and_Controversies