Indeed, this seems more like a post for Law.se, but perhaps I can advance with a partial answer. Given that we often hear on the Internet anecdotes of people being already selected in advance of the post being officially announced, it seems that it happens regularly in several countries, and not just in academia.
I would argue that it is legal, for two reasons:
(1) If it was unmistakably illegal, someone would probably have already found a way to punish the universities doing this, given its occurrence rate. And measures have been taken over the years at most universities to make this practice more difficult.
(2) This is merely personal anecdote, but I have heard a couple of stories of the "pre-appointed" candidate not succeeding in getting the post in the end. This happened when another person applied for the job, who already had a reasonable amount of public prestige, and a CV which was significantly superior to that of all other candidates. In both cases, the "pre-appointed" candidate did not get assigned any other position, since the institutions did not have enough financial resources at hand to achieve that. Instead, at least one of the candidates secretly received an apology from a department representative.
Therefore, as long as the universities follow the required procedure (make a public announcement for the job post), it is unlikely to be illegal. The reason why these "back-hiring" procedures are so successful is that, in most cases, the "pre-selected" candidate is actually competent enough for the job, and close enough in terms of achievements to the other candidates. When the candidate pool is similar enough, the department then has enough leeway to hire the "pre-selected" candidate. If the purpose of the "public post" requirements is to prevent clearly underqualified candidates from getting a post due to nepotism, at least from this perspective it seems to work. Needless to say, there is a whole debate to be had about the various reasons for this practice and its legitimacy, but that's beyond the point here.
Finally, for your second question, I do not think that it is entirely pointless to apply, since at least sometimes, the "pre-selected" candidate is not hired in the end. For every job post, there will always be people rejected, and only one is hired. Since the risk of rejection exists at all times, even when there is no "pre-selected" candidate, then I'd say that it's worth trying one's luck despite the odds.
