The computer happily gave Geordi a holo image of Brahms and her personality(admittedly with some flaws). That picture of her and her biography were all public record anyways. So I can't see any legal issues there. Geordi was using it as a "diagnostic" program. So Geordi pretty much screwed up there. That was the equivalent of using a work computer to look up porn while on the clock then a coworker finds out about it. All the more awkward being it was her, true.
You can argue it's questionable to simulate a real person. I wouldn't feel right about it myself. But there's nothing illegal about it. Today we live in an age where you can't walk a block down the street without being observed by half a dozen cameras and nearly every person has a pocket sized camera built into their phone. It's only going to get more widespread in 300 years. What you look like is pretty much accessible by anyone.