I just checked the in game help and it says, "Inactive character names are released when expansions launch for World of Warcraft." I've never seen anything announced about it, maybe I wrongly assumed there'd be one. However, GMs have been telling players it'll be "soon" in the weeks post-release of Legion, so either it didn't happen or they're unaware it did.
Given that it's almost 2 months into Legion as well as 2 months past MoP's release date (4 years ago), if it hasn't happened it's overdue.