While legendary Pokémon not being available in PvP is unfortunate, it really affects people who enjoy PvE more than PvP in an MMO as well (myself included). While you will be able to encounter and catch legendary Pokémon, and that's cool, you still will not be able to permanently own them outside some data in the Pokédex. Pretty much nothing new and the same thing as PokéMMO for the most part and it being a carbon copy, which again I know is going to be a very disappointing thing to people who dislike the KOTH stuff (myself also included).
While you can also make arguments and say stuff like legendary Pokémon aren't always the best in competitive play, they pretty much just want to make them truly unique within the MMO. You can even argue that they aren't the best Pokémon in general, and it still won't really matter. However, let's also keep in mind and not forget that they did make the 3 legendary dogs (Entei, Raikou, Suicune) available in PokéMMO when they released Johto (which, mind you, also came as a huge surprise to everyone with how they were implemented). They actually made an exception for them to actually make the other side of the community happy, where you can get your hands on duplicates of them as well. Although their availability is limited, you can still effectively shiny hunt them, even if it's a passive thing.
Not only can you permanently obtain and keep these, but on top of that, you can use them in both PvE and PvP to your heart's content.
I know that the topic of legendary Pokémon is going to end up being an ongoing and controversial one, especially if the developers aren't going to budge at all with them. There's always going to be pushback against it, and a lot of it. Do they have to budge at all with them? Of course not. I'm on the side of personally disagreeing with having them truly be unique, since I'd love to collect legendary Pokémon and they interest me. Being able to shiny hunt them in an MMOis a big goal, especially if they are actually something tangible you can keep, just like any other Pokémon that isn't legendary. I just fail to see the point in wasting time on them past getting the Pokédex completion data for them personally, even if you could use them in PvP and temporarily own them with the KOTH stuff and whatever. Time is just spent better elsewhere getting other stuff that you actually desire at that point.