What legal issues?
The Convention hasn't officially declared the candidate yet.
Donated funds were to the Biden/Harris campaign, not to Biden as a person; Harris is still fully entitled to them.
There's almost certainly an internal process in the DNC if a candidate leaves the race for any reason (illness, death, personal choice, etc), so that'll just be followed, and worse, the DNC is a private org, not the government, so there's really no legal issues as long as they're not violating their established internal guidelines. And even if there isn't a set process for a candidate retiring, that's not a legal problem, it just means you invent a process.

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