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Current status is that it is legal because it is not illegal (like most things). There is no law banning sharing a lane of traffic, like there is in almost all other states. Historically this has meant that lanesplitting/lanesharing is tolerated by most LEOs, including the CHP. Some local LEOs take a dim view of it, and are more likely to write tickets anyway for various infractions. There is no guidance on appropriate speed, whose fault is it when there is a collision, etc., as there is no law to tie to.
This was an issue last year when the CHP put out guidelines for safe lanesplitting, and some asshat protested (successfully, sadly) that the state wasn't permitted to lay out guidelines for something that wasn't a law. Though there are some downsides to the proposed law, which is why the AMA and some other groups oppose it, one of the potential upsides is that if passed, the CHP can then do more education to riders and motorists in general about the topic.
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