They are both (possibly) legal and illegal at the same time. Hence the "gray market" term that gets used. One popular version of this type of site even allows you to buy "insurance" so that if your key comes back as invalid they will keep shooting you keys until you get one that sticks. Tom's official stance on these sites is to allow them to be posted/talked above, but we should point out the danger of using such a site.
There is a use for these types of sites. Lets pretend you are going to open some sort of internet/PC "cafe". You go and build 10 machines and buy 10 copies of windows. X time later you have to shut down for Y reason. These sites would allow you to sell your copies and at least get some money back. This is a valid reason and AFAIK a legal one as well seeing as you aren't using the PCs in question anymore. Then there is the wildly illegal reason from a few years ago where people were using stolen CC numbers to buy copies of windows and sell them for real cash. When the CC company invalidated the sale of the key, the companies invalidated the key, and people were losing their programs at an alarming rate. There are many wrong reasons why keys end up there.
These sites cause headaches for us mods and as a general policy we suggest avoiding them. Buy a legit key and you'll never need to worry about it going bad. I'm not sure why you are looking at a key for $119, you should just get the basic 10home OEM key for $99.
https://www.newegg.com/Product/Product.aspx?Item=N82E16832416892