Loompoints refer to the loom option of when you retire, or the "freebie" of doing something special/fixing something.
Retire and it will allow you to spend a "loompoint" to loom an item and thus make it better (increase the heirloom level by 1 point, base items are +0, and go up to +3).
Freebies are given out when you win the chadz lottery, or given under special circumstances, and can be saved until you choose to spend them (and unlike the normal retirement heirloom option, these can be spent on any item even if your character can't use it).
They are legal.
If you choose to "buy" one from another player, basically you give them the item on the market that you want heirloomed plus a ridiculous amount of cash, and they heirloom the item for you and give it back. They used to cost 400K per point, but are now 700K minimum due to the inflation of less people willing to sell their heirloom points plus sellers knowing that the new items are making buyers desperate.
