This was a Critical Mass event, which is why the bicyclists are taking up all of the street as a way to reclaim the streets and protest the lack of safety for riders under usual conditions. It’s not legal, but protests are never useful if they’re fully legal now, are they.
It’s similar in the US. Most jurisdictions ban bicycles from the sidewalks in favor of pedestrians. Roads in towns/cities are paid for typically through property taxes. County roads, highways and freeways are funded through other taxes collected at the various levels.