Yes, teaching English in kindergartens in Taiwan is actually illegal, but it's a law that's not really enforced strictly. There are, and have been raids by police in the past and deportations of teachers has happened, but the kindergartens normally hide you when the police are around or get 'tipped off' before the police arrive.

With regards to working at HESS, if you can't find anything better (if you think HESS is the best try actually looking for other jobs) then do a year there and run, you'll see why after 6 months. I had a really bad experience with them, once I met one of their VP's, and discovered that this person had no clue about the business or about teaching, but they didn't see any issues with making teachers work unpaid overtime or split shifts that were 8 hours apart.
With regards to what people say about ethnicity, it's true, the same VP I met, mentioned to my friend that they found black people to be 'scary' and then questioned where my friend was from (my friend was born and raised in America, but their grandmother was Asian, so they have a very slight Asian look about them). Being racist is one thing but this VP was being racist towards their own race!

My advice, check out Happy Marian or Kojen or somewhere, from my experience people have a better time there, and their staff turnover is a lot lower