Ive been morphing my character for 4-5 years ever since the editting/additional MPQ files being added to the data folder. I think it's a bannable offence but if you're just morphing your characters looks I can't see them being up in arms about it.
Though I know people have been caught and banned for morphing the appearance of the WSG flag/etc... to ragnaros or a large display so theit's easier to find - they have been banned because that affects the actual game. The way your character looks/casts doesnt.