This was technically stealing.
It's really the responsibility of the cable provider to correctly filter services, if they want to charge for them. And you'll probably find that if you call up and try to "complain" about this, that they'll do nothing and tell you to do as you like, as it isn't even worth their time to bother about... putting a rather low bound on the degree of harm you're "inflicting" on them even in the worst case.
The demarcation is generally clearly marked (plastic box often called a 'network interface device') and is almost never located at the modem itself.
Typically, the legal demarcation is on the exterior of houses. For a multiple dwelling unit (apartment complex) or commercial building, the demarcation is usually inside. ISPs try to choose a demarcation that is accessible from the outside, so as to not require being allowed into the building to test signal leading to the premise. This cuts down on cancelled repairs due to 'no access'. My point in all this is that for most coax and twisted pair services, the indoor wiring is usually the property owners and not the ISP's, especially at the point where it connects to the modem. For someone to add a splitter to wire that is their responsibility and property is almost certainly legal.
I worked for one of the bigger ISPs up until last year, so I speak only from my personal experience. For more details:
Yes, but if cable companies always provided and required you use their cable modems, then there would be a clear demarcation point, the cable modem. Whether it's usually inside or outside is irrelevant (and "usually" in this case is debatable. I've worked at multiple business locations where it's inside, because there is a location dedicated for it). Of course there isn't a clear demarcation at the cable modem, as many cable companies allow you to use your own cable modem instead of theirs, which is why I said the issue is "muddied".
Technically.