There are a lot of problems with that law, but it is the law nevertheless.
No, it is not. It is only illegal if the purpose of the repeated deposits/withdrawals is to avoid reporting.
My point exactly. From Hot Tabasco's post, to which I responded:
Back in 2013 there was a local family owned grocery store whose bank account containing $35,000 was seized because they were making constant deposits just less than $10K in a bank across the street from the store.
If that statement is accurate, and I have no reason to believe that it isn't, then the activity clearly indicates a deliberate pattern of planning deposits to avoid the bank's reporting requirement.
On the other hand, if the deposits varied over time, like $3K one day, $8K another day, and so on like that, then the activity would have been much less suspicious. An occasional deposit of over $10K (or even a regular deposit over $10K) would not be suspicious for an established cash business. That happens all the time in the business world, it's normal and not illegal in any way.
So, why would someone running a legitimate business engage in a pattern of activity that will alert bankers to possible illegal activity? That's just stupid.