I just ran RDF Oculus where one person was multiboxing as DPS. They were on a mount and on "follow" on one of the toons until the first boss and then the character was left there for the duration of the run. There was an attempt to vote to kick that player which did not pass, and when I commented on this the tank said "you can leave if you like" then healer said "or tank and healer can leave" ...which would make sense as to why vtk did not pass: tank, healer and multibox would have majority on that, so I kept off my keyboard for the rest of the run in case they decided to vote me out.
Is multiboxing in dungeons 'legal' or is this something I should report?
What is illegal is to refuse to participate in dungeon. You should have taken screenshots and reported that afk guy. Or simply left the party. But now they can report you for refusing to participate, since you went afk.
I think by "kept off my keyboard" he meant "kept my mouth shut", not "afk".
And no, multibox in a dungeon isn't "illegal". It's a bit annoying at most, but not really reportable. As suggested above, next time you encounter... lets say "unpleasant" people in rdf, instead of getting yourself kicked or grieved, just snipe an opportunity to report them if they break rules. Don't start breaking them yourself in the sense "well they can do it, ofc I can do it too...". Don't be childish. It might work against you.
Also, OP. You should take into account how much said "multiboxer" contributes towards dungeon clear. BiS/preBiS player is effective as 2-3 regular DPS guys, if he is nuking mobs in dungeon run, there is no real reason to be vocal about one toon on "follow".