I’m not sure what above implies it was illegal. Often when running in tight packs, we will flair our elbows so any contact is a gentle eblow to elbow contact, and not the dangerous bike to bike contact. Usually this is good incentive to hold your line and prevent a dangerous crash. However in this case, Simon went from defending his position to opening up a large hole for Hoy to ride through.
Heck, if Hoy tapped my elbow in a race, I would probably give him room to pass too. ;-)