I wonder what law did this scrapper break except the sensitivity and significance of the wreck. Just because the American or British says "it is illegal" doesn't make it illegal.
The wreck is far out of any territorial water of any state. Malaysia got involved only because the wreck is within its EEZ (100km off Malaysian coast). However, any coastal state only has limited jurisdiction and right in its EEZ, namely economical related matters, such as fishing and oil gas etc. A ship wreck isn't economical resource, so Malaysian law seems not apply. The UK is the owner of the wreck, but it is outside of UK territory, so UK law does not apply either. There is no international law covering such matter as far as I know.
An analogy can be made inside a country, there are many dead bodies on Zhumulangma (Mount Everest) which is a public land, not grave yard, moving their bodies are perfectly legal without the concent of relatives. But in reality, the concent is sought after as respect for the deceased.
I am not advocating such kind of activity, but I doubt that the scrapper would end up in any legal panalty, nor do I think such activity would stop because there is no legal base to prevent it, nor can any country to amend their domestic law to prevent it without changing international treaty on EEZ.