It really depends on where you put it and who is looking it over. If it is in a dynamo cab and it looks kinda like a neo geo, you can get away with it.
You can have tax stickers all over it, you can get those for anything. They don't open the hood and see what's under it. Tax stickers don't make anything authentic.
If I did it, I'd just have one game running on it at a time. Just switch it out from time to time.
Legally, copyright legally, no, you can't legally run that machine. You might be able to get away with it legally if you ran say MsPac with a dead MsPac board in the back, that's your licence.
It might raise eyebrows if it reboots on you. I'd just let it run and don't shut off. If you can rig Dos, do it. Just change out the mame command line and don't use a front end.
I have 4 real arcade games in a store that have been running continuously almost a year. They may have shutdown in a powerfailure, but otherwise they don't even have shutoff switches on them anymore. They look the same as the day I put them there.
As far as Namco, etc going after mame, there is a larger group of people moving in that direction. All of the AAMA and other groups are thinking about it.
There have been bootlegs in operation since the first video games. Look at all of the bootleg Ms Pac's and knock off boards that were made in the golden age. They didn't come in and raid arcades as far as I know to find these things.
I have already seen Mame Machines at the arcade auction. I remember talking to an op about the machine and when I told him what it was he became upset. He looked at me and said "then why would people need these machines?" Well, he's right, the collector's market will shrink.
Mame and Multigame machines will take up the casual collector. These mame machines are already on the street because they are being manufactured and sold at low levels in these auctions and on ebay.
It's really just a matter of time.