You can read the TOS if you like (strem.io/tos), but in general the software is using third-party "services" which provide content and metadata. Currently, we run the metadata service, and the content comes from a third-party service which aggregates torrents.

The straight answer is "yes, it is legal" but this is about Stremio itself and not the services and how you use them.

Currently all services for the product are enabled by default, we will add an UI enable/disable/add very soon.