wsc981 made an unfortunate language error / directly translated a Dutch expression to english; 'being illegal' in his example translates to living in the Netherlands as an illegal immigrant, which, while 'illegal', is not actually enforced as a crime.

I think what he meant was that you can't be punished for being an "illegal alien" in the Netherlands.

"Illegal residence is only punishable if the party involved has been declared 'undesirable'" (http://en.justitiaetpax.nl/project/aliens-detention-in-the-n...)

Yes. But not for being illegally there (here).

He means 'being illegaly there', i.e. being an illegal immigrant. This was part of a recent political debate; it was reconfirmed as not being punishable. It would have affected mostly individuals that are also banned from entering their homeland, and are ping-ponged back to the Netherlands.