There's also "back channel" references. If there are some red flags but someone at the hiring company knows someone who worked with that person, they often reach out to get feedback from someone who worked with the candidate directly. Many companies do this during early stage interviews to see if they should continue. They're not official references by any means but pretty common in a small community like the Bay Area tech industry.

Definitely make sure you're giving references who are reliable. But why would /anyone/ give a reference who would badmouth them?

Haven't you ever been surprised to find out that someone didn't like you?

HR professional weighing in here :)

You are correct. It's not just "if they're smart" it's "if they're complying with the law." Former employers are only legally allowed to confirm employment, salary (yes, really), and whether or not you're eligible for rehire.

How is it illegal? Source?

Do you mean they're opening themselves up to a lawsuit by saying anything else? If so, that's different than being illegal.

What state? Employment law varies considerably from state to state, and I didn't think that's federal law (but IANAL).