Robert - This type of action will and does give AirBnB a bad name! The ethical approach is to be above board in all our dealings whether it is with landlords, HOAs, city, county or state government.
As a guest in New Orleans, we were asked to tell anyone who might ask what we were doing there that we were "friends" with the host. That's when we found out the host were concealing their AirBnB from their landlords. I felt VERY uncomfortable staying under those circumstances. Since it was only one night, we did not ask to be rehomed.
As a new host, we comply with zoning regulations, have a business licence, have submitted our paperwork to pay personal property tax on items associated with the business, and had to change insurance companies to remain covered. Not fun but it is what ethical grownups who want to live with integrity do.
Hope you were kidding and I missed the humor