Is Norbert’s Gambit legal and can I use it with a TFSA?

Norbert's gambit is a legal way of avoiding additional currency conversion charges. You can use Norbert gambit to avoid service charges, and you'll end up paying insignificant ECN fees and the standard commission for selling an EFT/stock.

However, Norbert's Gambit has nothing to do with contributing to your TFSA, so it doesn't affect your contribution limit. Therefore, it is viable to hold USD funds in RRSP but still with CAD version in TFSA.

You cannot use Norbert's gambit in a TFSA account. It simply doesn't apply, as there are no TFSA accounts denominated in USD.