I wouldn't use the word "illegal" - it's a directive of OMB (the White House's management and budget office), not a law or a regulation or an executive order. The only true enforcers are OMB themselves.

But to answer your other question, as part of the Department of Commerce, a "CFO Act" agency, USPTO would not be exempt.

Thank you for clearing that up. Are you aware of what kind of consequences might be incurred at the expense of disobeying the OMB as a government entity?