Is letting your toddler play teen videos illegal

By law i really don't think so. It does say on the actual game that M games are recommended 15+. Meaning that the child does not have to be 15 to play them. BUT he/she cannot buy the games. So it really depends on what you feel is right. :)
I think that actually letting them play would be a bit sad on the parents behalf. It is exposing them to violence and drugs and so forth that toddlers don't need to experience in their early years of childhood.