I wouldn't say it's illegal.
There's a safety build in the 'char bazaar' meaning, you can't bid with same account and 10% of the bid is always taken from your account. This prevents people from bidding something foolishly.
Is it morally ok - that's another question xD
EDIT: I've read everything that's on Tibia.com in regards to Char bazaar. It isn't mentioned anywhere whether you can or can not do it.