I'm not talking about legality (at least not directly), I'm talking about how working on this project will affect your career at this company. If the company puts you to work taking apart someone else's product and documenting it, but then relegates you to that role forever because they don't want you "contaminating" their IP with anything that might be patented, that means that you can never go back to an engineering development role at that company. You'll always be stuck just taking stuff apart and documenting it, and when you get tired of that, you'll have to quit and find yourself a new job at a different company.

So I'm questioning what kind of quality work you're going to get. It doesn't seem like top engineers are going to want to take that job, and in fact it'll probably be the bottom-of-the-barrel engineers who'll want this job because it's a stable paycheck and there's zero room for creativity or inventiveness. So what kind of results are you going to get, by not having really talented and knowledgeable engineers looking at it?