I would avoid doing something illegal verbally too.
None of this matters unless there is an accident, but if there is an accident, injured passengers (even if they are mates of yours!) are likely to lie if this means they get a bigger payout, and this is more than likely to happen because passenger liability hangs on establishing the pilot was negligent, and this is a lot easier to show if one can show the pilot was doing something illegal
A lawyer will be aware of this angle and will try to steer things in the appropriate direction which makes the pilot appear in the worst possible light.