I don't think there's a catch-all definition. Some are pretty obvious, others are more subtle, so it's usually judged case by case. Either way, it's the developer that decides.
Right, that's the point. In fact, I'd go even further. In a competitive environment it's not strictly about what the developer/organiser says the rules are, as much as it's about what they'll enforce and punish. That sounds silly, so let me explain.
For example, F1 for years was notoriously lax about letting drivers force each other off the road in certain situations despite the rules saying that they had to leave racing room. The rules were fairly clear, but the precedent from the stewards was also pretty clear and so the drivers continued to force each other off on corner runout because that was something that was incredibly rarely noted at all, let alone punished. It was just something you could do, and if you weren't doing it then you were easier to pass.
When there's a difference between the rules as written and the rules as they're enforced, the rules as they're written don't matter.
So in something like GT the developer can say "no wallriding" in general terms, but if the penalty system doesn't penalise you if you wallride in a certain way then that is implicit permission to do it but only in that certain way. When the rules are ultimately mediated by the game, there's a pretty strong argument that anything the game allows you to do is fair. After all, there's plenty of games in which that sort of precise control is considered a feature - part of the mechanical skill that separates the pros from the casual player.
This is not to say that the game and gameplay might not be better without whatever strategy or technique is the problem. Degenerate game environments exist, but they're a problem for designers, not players. As a player as long as a technique exists and gives you an advantage, you're a bad competitive player if you don't use it.
David Sirlin's
Playing to Win is relevant reading here. It's primarily about fighting games, but the competitive principles apply to any game including sim racing. Linked is a summary article, but I recommend any serious competitive driver read through
the actual book. It's essentially a series of short articles about the mental aspects of playing competitive games, and the ways in which players will (often unknowingly) self-sabotage by creating arbitrary rules for themselves.
To be super clear, I think the game would be better off without wall-riding in it. If nothing else, it doesn't fit the realistic image that Polyphony is going for. I also think that there's a ton of ways that Polyphony could make it impossible or at least not competitively viable if they actually wanted to (primarily clever track design and more advanced contact physics). And so it's continued existence is more like a feature of the unique combination of Polyphony physics and track design. It's part of the game, like bunny hopping in Quake or BXR in Halo.