Fansubing is not legal, and that is the case in many countries. At least, the raw distribution is, since it's a copy of source material.
I do not exactly know wether the fansub text itself is illegal, depends on the country. But even there, I guess there's the fact your work is a copy of a protected one.

That aside, without fansubing, there's almost no way the industry would have grown outside japan. It's not a multi-billion market... yet, but many people have been earning money thanks to 2 things:
The legal ways, starting probably in the late 70's with anime broadcast, that ignited the movement.
The illegal ways, that promoted shows and manga, in all its kinds, throughout the world, without censorship or marketing targets.
And thanks to that openness, some shows or manga you'd never even have dreamt of became available and enabled legal ways to flourish for those shows or others.

So yes, it's still illegal, but nothing is all black or all white. Funimation is able to sue people only because OP became popular for many reasons, and partly thanks to fansubing.
Hammering people that would never even think of buying OP in the first place, might have a dire effects on sales later. Never underestimate backfiring, the internet is a small world.