My understanding (going back many years and pre-EU, thank heavens) is that a charter flight represents a contract between the airline and the booking company, and that failure to fly the flight AT SOME TIME would represent breach of contract. This did not, apparently, apply to scheduled flights which could be 'cancelled' as long as the booked passenger was given some sort of alternative. For the charter flight, the flight number had to 'fly' at some point. I think 'illegal' should read 'breach of contract' which is a little different. I can certainly remember DanAir Ops saying the same - about needing to operate the flight.
Of course this may/probably will have changed over the years, but I think the basis is still there. We are obviously into lawyer infested waters here.