Well, here's my thinking. If the moves are all Egg Moves - i.e. things I could breed anyway - I can breed an Egg from this and that does it. Get rid of the Shiny, new baby is used. Literally, all it does is save me some time Egging any moves I might want to keep anyway, and he apparently only hacked Shininess; I don't see in Power Saves an ability to hack moves. So the moves are legit. Not the Shininess.
Therefore, breeding an Egg from what would otherwise be a lagit. Pokémon, and would still be a non-teammate anyway, is perfectly fine.
I just should never use the hacked Shiny otherwise and get rid of it after that. I can banish it to Box 30 with the hacked (but seemingly legitimate, I have my reason for knowing) Shiny Lugia in there, whose Leftovers I have already swiped (it can starve LOL), or remove it completely. (And FTR, I took it off someone's hands for some Enigma Berries after we identified it as a hack. I knew I was getting a hack. I had no problem with that. It's never going to be used.)
Makes me wonder if using the 999x items code would come off as legitimate if you clone (considered legitimate) and then utilize that code to put an item on every single clone; in this case, I did get a Minato Mirai (Surfing) Pikachu, but if I clone it and share clones, technically I would have to multiply the two Silk Scarves I already have (one that came with it and likely generated thus, the other I already had).