Since they have decided to stop updating D2R, how long until it becomes a legal gray area and Blizzard can’t send a cease and desist notice? I know something similar is how path of diablo is allowed to operate and why Blizzard started up wow classic servers. But I don’t know the legal requirements that have to be met before a game is considered qualified for private servers. Because Blizzard still hosts D2: Lod Servers? Does anyone know anything about this and when we might be able to start playing on private servers without running into issues?
I’m not a lawyer but I’d imagine since it’s their IP they’ll always be able to send a C&D to any private servers if they wanted to, if being the keyword. They’ve turned a blind eye to LoD private servers (and hardcode editing) for many years now, even giving them a nod of sorts when they announced that TCP/IP was being removed from D2R and they said “However, keep in mind the Classic client of Diablo II will still exist and that is not going away. Multiplayer mods will still be able to exist and thrive on that platform by our community there.”
But I don’t know the legal requirements that have to be met before a game is considered qualified for private servers.
There’s no such “legal requirements”, unless they change their EULA then it will always be against the rules to create private servers (not gonna get into that whole “are EULAs legally binding” debate, I don’t know so I’ll leave it to the people who do know 
), now whether they actually enforce it or not will remain to be seen. I’m guessing the first one or two D2R private servers that go big will get struck with a C&D but who knows, maybe they’ll turn a blind eye to it like they did with LoD.
Does anyone know anything about this and when we might be able to start playing on private servers without running into issues?
Gonna need to get the actual private server architecture to a workable state first, there’s one that released a few weeks ago but it’s got some bugs and it’s only limited to Act 1 currently.
TL;DR: Nobody really knows. I’m guessing it’ll still be a year or two at least before any private servers really get going, depending on how quick the private server architecture devs work.
This is not a matter of time, but location. Set up your server in Russia, or at least anywhere else in Europe, or at the very least outside the USA, and you should be safe. Proven by WoW pservers.
This is as a grey area.
And as a “white area”, so you can rest easy? Probably never and nowhere.