It is in this case (originally), because it's a leased vehicle. It's not "your own car" in any meaningful way. You aren't allowed to do maintenance on a Hertz rental either. Legally there's nothing wrong with this device being on the car.

But in this particular case, they had already sold the car to the guy's family and didn't own the title any more. Yet the kill switch was still in place and they decided to use it over some random fee (which seems to have been for the kill switch itself, per the article). That's pretty obviously illegal.