As far as I know it's not illegal, just dangerous. There are some places where "house rules" prohibit fake guns to prevent confusion and panic, but I don't think that has the force of law anywhere. Maybe in airports.
The safety-orange tips are a practical safety measure to limit confusion. Some years back, I worked on a satellite phone that had a big extendable antenna that sat at a 135-degree angle to the body; when extended, it bore an unnerving resemblance to a Luger. We actually had an engineer held at gunpoint by the police in, I think, Oklahoma; they were yelling at her to drop the weapon, she was saying in utter confusion "*what* weapon???", and it was in general not a fun experience for anybody. We designed a safety-orange tip into the antenna after that incident.
-NT