It isn't illegal, if the agent has the seller's express permission. Which I highly doubt is the case. I can only imagine the conversation asking for such a thingâ€¦. "hey, you don't mind if I show all your cards to other people during negotiation, do you?"
What it is, and what it shows is a serious breach of etiquette, sense of FairPlay, and downright tackiness. One would have to ask one's self: "Do I wish to do business with someone who conducts business in this way?" The fact of the matter is: Anything someone is willing to do FOR you - that person is also willing to do TO you. Ethics are important - key, really - in this business, as is a pattern and practice of using good judgment. A real estate transaction is quite involved and takes many twists and turns along the way. One of the best ways one can protect one's self when buying or selling real estate is to watch the agent for their sense of ethics and FairPlay - and run the other direction when it becomes clear that the agent doesn't have a sound ethical foundation.