California is a whole different animal. Unless it has a CARB/BAR certification (as you will see with many aftermarket parts), it is not legal. Remember, California had emissions requirements way ahead of the rest of the Country.
Do people with testing exempt vehicles remove emissions equipment? Hell yes they do. Do they get caught? Very rarely. Why not? Because without the Biennial testing, who will know. However, in CA, there are roadside test stations set up every so often, and any CHP officer (or other law enforcement), can write you a ticket for suspected emissions violations. It is basically a fixit ticket (like having a missing front plate, or busted tail light), but the only way to have it signed off is to take it to a BAR certified referee, and these guys know their stuff. Is that likely to happen? Not very, so make you own mind up.