It is basically one way of saying "bitcoin is not against the law, but its also frowned upon and disliked by the government". Nobody can throw you in jail for having bitcoin, hell there was a whole topic about how India will ban it totally but didn't, yet that doesn't really mean they will just make it legal and support it suddenly. In the world of laws, "not illegal" doesn't really equal to "legal" at all times, there are stuff in between those levels.

Just to give an example (made up and overblown) you could have bitcoin in your wallet as an Indian and they could make life horrible for you, first sue you, then trial you, then hold your money meanwhile, do everything in their power to make sure you hate the day you ever got into bitcoin, but decide that nothing is wrong and let you go. You got absolutely nothing charged against you in that case but life turned upside down which is done to stop you.