They may have lumped black water and gray water together, or they may think that any water other than rainwater or treated water from the hose will have impurities that will build up and contaminate the soil over time. I guess they figure they must stop me from my desire to contaminate my own garden. [sigh]
More info on using gray water in California --
The state Department of Health Services has stringent guidelines that ban using water from the toilet or the kitchen. The water that is used
must be piped 9 inches underground and used for landscaping or trees only. It may not be used on vegetable gardens because there is too much chance of passing on dangerous microbes, state officials said.
So if you run the kitchen faucet waiting for the water to get hot, you can't collect the water in a pan and throw it in the garden without breaking at least two state laws since the water is from the kitchen, and the water didn't pass through an underground pipe.
These are the same folks who told us that water was so precious we were not to flush our toilets unless we had gone "number two".
We've actually had commercials saying, "If it's yellow, let it mellow; If it's brown, flush it down."