Yep. I know of a top host who was making a FORTUNE by illegally subletting apartments in Hollywood. Sometimes the landlords would find out and kick him out. Although interestingly some landlords LOVED having him subletting multiple units -- I guess because they had trouble finding long-term tenants or quality long-term tenants.
One thing to look out for when looking for a stay is hosts with multiple units.There's gotta be some illegal subletting going on there.
And actually I pause when I see ANY host renting out an entire apartment in Los Angeles. Unless they are on vacation, it's now against LA City ordinance to rent out any space unless it's at your primary residence.