Highly illegal in most likely all states.Every state has laws against obstruction of license plates.
I can see this as being legal because it's still human readable.
Plate readers aren't expected to be 100% reliable as is (angles, lighting, network goes down, etc.) Plates get dirty, sometimes rusty. Also you can't test your own plate for machine readability against all the different types of systems cops use, so how could you reasonably know the issue is on your end and how to fix it?