Yep, it's against the law but do people sometimes do this and get away with it?? Sure they do. We've all seen it and yet no one seems to be swooping down on the violators to haul them off to jail.
What law? There is no law I know of that prohibits defacing coins. The only time there is a problem, that I know of, is when it is done to deceive. Otherwise, there would be a lot of penny flattening machine owners in a lot of trouble out there.
United States Code TITLE 18 PART I CHAPTER 17 § 331. Mutilation, diminution, and falsification of coins Whoever fraudulently alters, defaces, mutilates, impairs, diminishes, falsifies, scales, or lightens any of the coins coined at the mints of the United States, or any foreign coins which are by law made current or are in actual use or circulation as money within the United States; or whoever fraudulently possesses, passes, utters, publishes, or sells, or attempts to pass, utter, publish, or sell, or brings into the United States, any such coin, knowing the same to be altered, defaced, mutilated, impaired, diminished, falsified, scaled, or lightened Shall be fined under this title or imprisoned not more than five years, or both.
Look up the definition of "fraudulently" (with the intent to deceive). Those coins were not "fraudulently" anythinged.
I forgot to throw in Hobo Nickels as an example also and coin jewelry and any company painted junk all over them!!! etc. etc. Yes fraudulently is the key to braking the law, half of that law was designed when coins were made of precious metals in the attempt to prevent clipping and shaving them so that you could keep bits of the silver and make a profit and the second is to not try and alter them in such a way as to deceive people into thinking they are worth more than they really are
As far as I'm aware, that law is still in effect. A while back I read somewhere that there was a company trying to change this law to allow melting of the 95% copper cents, and they were hoping to be the exclusive company to do it.
Also, back to the original question, it all depends on who may or may not consider it fraudulent alteration. While most would agree it is not, you never want to be in a position where a lawyer is having to explain things for you.