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Technically not illegal. If you REALLY want one, you can bring one into the state as a new resident. The California handgun laws dont 100% apply to guns brought into the state by new residents.
The law that doesn’t allow this to be sold only applies to guns sold new by an FFL in the state of CA. So you can bring in all the handguns you want that didn’t pass the CA drop test, but only when you are becoming a new CA resident.
I am no lawyer, but it seems that once the gun is in the state and legally registered, its all kosher to sell and trade. Handguns on the approved list must be approved each year, so once they are transferred, they are ok to trade. They dont make everyone turn in their handguns that arent approve yearly…. yet…