In short, the answer is YES, it IS ILLEGAL
Street walkers used to be able to run the streets not too long ago actually but HK has really cleaned up house in these areas. I remember about 6 years ago I would walk from Temple Street, back to my Hotel in Mong Kok nightly and the streets were PACKED with Mainland girls 1 block off of Nathan Road, rarely ON Nathan Road itself. For the next 2 years I went back, I would still see them and occasionally get a room away from my hotel. Then about 3 years ago, I went back again and it was EMPTY! They really cleaned the place up, probably because of the shopping areas with many more tourists. Although one can always find really young local girls making a buck to pay for that new LV bag that they have been eyeing for the past month.
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