Cully ... I know of a certain dock on Watts Bar Lake, that had bales sunk around its walkway & boat slip edges/ends. There were Crappie being caught from around them, one Spring weekend that I was there. Now, whether or not the bales were key, or not, I can't really say. I don't even know what type of bales they were (what they were made of). It was also Spring spawn time, and the dock posts may have already been a point of interest/use, by the Crappie, before the bales were dropped.
I do know that bales have been dropped in lakes, so I'm sure "someone" thinks they're doing something to create a "spot" for fish ... but, what particular species they believe will use these bales ...
The legality issue is probably a matter to take up with the TWRA, or your local COE, as they would know which lakes allow the planting of cover, what types are allowed, and whether or not you have to have a permit (or just verbal permission).
... cp