Technically and legally are separate issues. A company I have worked for, did successfully clone a license in a way that using 3 images cover 350 machines with 3 licenses. I didn't bother to blow the whistle on it due to the fact that they did legally have nearly 400 legal licenses and install disks sitting in the closet, just the concept that the images had to be mass produced and at the time neither I nor they were familiar with sysprepping. I'm not going to explain how here, but yes all of those were successfully activated and ran without a hitch getting updates and everything for a full year while I was there. Around the time I was leaving that job they were attempting to negotiate with microsoft a bulk license deal, they hated the idea of it due to not wanting to pay twice for it.
Now in my view from that scenario, the one in the legal right was clearly Microsoft, however the one in the moral wrong would be the countless microsoft licensing support representatives that they talked to, who told them there was no legal solution for their problem besides re-purchasing the full 400 licenses. (with my knowlege these days I know they could have sysprepped and used the images on the systems, however I didn't know that 8 years ago)