Sorry for the double post, it's been a few weeks and I wanted people to get the alert although idm if it gets merged.
Okay so I'm going to talk about why I think Illusion is worthy of a suspect.
A lot of points about this have already been outlined in the post by esteemed user
GL Volkner as quoted below, so I'll try not to restate things unless I think they need restating.
It might be a little too soon to call for a suspect, but I think it's time we looked at Illusion.
As a preface, let's take a look at what this ability does. Illusion lets you disguise yourself as any Pokemon as long as said Pokemon is in the last slot of your team, for as long as you don't take damage. Another one of its properties is that it prevents Imposter from transforming in front of you while Illusion is up. An Illusion user using a Z-Move will also break an Illusion. Finally, the other meta relevant property I believe it has is that if a Pokemon with Illusion undergoes Primal Reversion or Mega Evolution while the Illusion is up, the Illusion will stay up until you switch out, as your native ability replaces Illusion so it doesn't actually mind the chip damage.
So how does this look in the metagame? Well, for starters, Illusion can be used on anything, and you have no indication of if it's present on a team. While you can narrow down the abilities a Pokemon has at team preview, you definitely can't look at a Pokemon, say "Oh look, this is definitely Illusion" and play around it as such. Therefore, when the game starts, you're either forced to play under the assumption that every Pokemon that hasn't altered their HP can potentially be an Illusion Pokemon, or you're completely ignoring the possibility. While the game runs its course, you can pick up hints that state that an Illusion is present - Mainly looking at interaction with hazards (25% and immunity to Toxic Spikes can tell you it's a Rayquaza, 6% can tell you it's an MMX or a Garchomp, etc) and also looking at when they send their Pokemon out (bringing their Diancie in on your Flash Fire Registeel when it's a perfect opportunity for them to send in their Choice Band Gliscor or some shit) but the thing is that this careful playing creates a multitude of of opportunities for them to punish you if you misplay once. Yes, misplays should definitely be punished - That is how this game works, but it should almost never punish you hard enough for you to lose the game unless you like harded your Giratina into an obvious Diancie Boomburst while they still had their KFC or some shit.
The presence of Illusion forces you to play defensively which is actually perfectly fine by itself, but there's also the issue it creates once Illusion is revealed. If you have an Illusion Pokemon that's disguising as something at an identical HP percentage (This is assuming that Illusion is revealed so you really should be playing on exact recorded HP values) or at max, then it creates a 50/50 assuming you're using Illusion properly. "This can be a Pixilate Diancie and I could switch in my Ho-Oh, or this could be that Illusion Band Ray and I could risk losing my Ho-Oh to it, so maybe I should click my Fur Coat Giratina..." As in, you're playing 4d chess while the Illusion user is sitting there enjoying the results of their (arguably low risk high reward) teambuilding.
I'm also gonna say that Illusion is very splashable - The two S ranks can use it effectively, Kyogre, Gengar, and MMX can use it effectively (and hell Illusion Diancie-Mega doesn't even sound that bad but let's ignore it for now), Groudon and Kangaskhan can use it effectively. That's pretty much every notable offensive Pokemon in S and A, and when you look at the guidelines (they're guidelines btw, not a rule,) splashability is one of the guidelines for a potential ban.
The other guideline is extreme augmentation - Yes, I do believe Illusion is impossible to solidly counter because you don't know what has it in the first place. Every attempt to counter once you know something has it is a 50/50, assuming that the Illusion is played well - HP values can give an Illusion away, so that's still a drawback. And before that? You don't even know it's on the field, so how're you supposed to counter something you're unaware* of? (*also not an Illusion check.) And yes, the power does originate from the ability. Choice in Pokemon is ideally offensive, but otherwise it's irrelevant. Choice in item is irrelevant, though you could argue a Z-Move Illusion plays differently than a non Z-Move Illusion but that doesn't necessarily have to be true amongst all Illusions, Z-Move or not. Choice in moveset depends on the Pokemon but no move is necessarily required to use Illusion effectively.
I'll just say here that I don't think Illusion is broken - I eat teams with it for breakfast pretty often since not many people use Illusion well right now (there are some though) but I do think it's uncompetitive and the more it's allowed to fester in the meta the more it could potentially become an issue.
That's pretty much all I had to say I'm aware I prob missed a lot of shit like how Z-Move use breaks the user's Illusion can be/is also a disadvantage but reply to those on the thread (or don't bc I kinda wanna keep my activity on here low, I'm that cool guy who influences stuff from the sidelines and off the thread. I'm literally an ice kyub.)
Contrary is broke as fuck btw but that's a story for later haha!
I'll start out by saying obviously illusion isn't the most powerful ability in a narrow sense since it doesn't increase power like the late and great Water Bubble or Stake Out, so my arguments won't rely on calcs of things doing 58725932%. (Ftr I'm not gonna talk about Illusion don bc it doesn't really fit the same category.)
That being said, why do I think it might be banworthy? The thing with Illusion is it completely rewrites what it means to play. Normally you look at their current mon, and then the rest of their team, and try to evaluate what the best course of action is that will beat what's in front of you based on the various sets it might be and not leave you open to the other 5 mons, while ideally putting yourself into a stronger position. However with Illusion this isn't what you do; instead you look at the mon in front of you and try to evaluate all the likely sets and then try to evaluate what is going to happen if it is any one of the other mons on their team and decide a course of action from there. The problem with this is unless you happen to have a very specific wall, or their team is terrible (we'll assume it isn't), there isn't going to be anything you can do that will be reasonably safe in both possible situations. Either you play the mon you see in front of you and risk losing something almost every turn until you've revealed most of their sets, you do some sort of hedging your bets which leaves you worse off in every situation or you make some sort of crazy plays going to things that don't check in the hope they're an illusion. And for all of these hypothetical scenarios there's no need for anyone to even have illusion - most of the time you can get by hoping they're not but if they do you'll probably lose.
Of course there is some counterplay to Illusion: get hazards up and look how much damage things take; scout the majority of their sets; get chip on things, to name a few, but all of these take time and will rarely help you for the first few turns.
So here is the core of my argument: it's infeasible to play as if any mon you see could be any other member of their team until you are certain otherwise. As to the problems with facing illusion once you know they have it I think vd summed it up as well as I could.
https://replay.pokemonshowdown.com/gen7balancedhackmons-705152916
I didn't have too much time to look through replays, so here is one from the Open. The only relevant thing in it is turn 1, there's no sign that anything is illusion and Hassin makes what looks like a safe play (spoiler: it wasn't), the point being that the entire calculation of risks and rewards is skewed hugely towards the player using illusion, since not only do they know their sets (which is the information advantage every player has to start with) but they are also the only one who actually knows which pokemon is on the field which massively cuts down any potential "safe" plays that can be made.
I'll outline what I see as the obvious counter arguments to try and cut down the initial arguments to deeper ones:
If you lead imposter you don't get bopped turn 1 - this is true (and what I do on ladder) but it would be absolutely ridiculous to suggest everyone should both have an imposter and lead with it. Also this is only useful if they lead illusion, which the person who I think it's fair to say is the main high level illusion user doesn't do.
You can run protect clones on everything to scout - again this is true, but often revealing one move isn't enough to give the game away (at least in the case where one offensive mon is disguised as another) and it has a very high risk associated with giving away a free turn to set up which can often be just as costly as losing a mon to illusion. There's also the cost in teambuilding where literally everything bar maybe specs ray has huge 4mss and the cost of running protect moves is usually to greatly reduce what you can check or what damage you can do.
Just a note on the ban guidelines and how it fits in, I think Illusion definitely falls into the category of Extreme Augmentation ie increasing the capabilities of the mon it is on so that the set is very hard to check or counter. The difference here from previous suspects is the difficulty comes not from "raw power" but from the fact that you are forced to (try to) check multiple things at once, which limits you to the intersection of their checks, or just hope you guessed right. It does say the power has to be independent of the mon or moves used and I believe this is fulfilled by the ability being viable on most of the top tier offensive mons and with a wide variety of moves and a smaller variety of items that can be effective. I say it satisfies this despite clearly being somewhat dependent on other factors because it's obvious it must be: Huge Power isn't broken on a fully special pokemon or on a Nihilego for example.
I'm not the best at putting my thoughts into words so hopefully this is coherent and restarts some conversation.