Caliostro said:
PS: Why is this illegal besides some retrograde sense of uptight political correctness?
PC has nothing to do with it. It's because it costs money to replace the money you take out of circulation by defacing it.
But the law is, it's illegal only if you deface it to the extent that it is no longer usable.
reference [http://www.divinecaroline.com/22307/82928-what-s-legal-comes-legal-tender-]
I'd have to guess that wouldn't apply to any of the bills here; they all look pretty usable to me.