Traveling to Japan from 28 January 2017 until now (post this on the Shinkansen), and always use airbnb (in Hakata/Fukuoka, Kyoto and Sapporo).
The host in Hakata & Kyoto stated that b&b still in grey area (between legal-ilegal). Main problem for the neighborhood for this business is garbage separation (since this is one of important things in Japan) and crowd/noisy during the rest time. While, the main problem for the hotel/inn owner ("legal" place to stay) is unfair business competition, since the requirements for the license is difficult, also the fee/levies for such license is expensive.
Currently, as long as no one (neighborhood or building owner or building management) reporting the host and/or the guest to the local gov/police, the business (bnb) still run as usual :).