Yeah, I've wondered about that before.
I know that physical shops in the UK
do sell them (If Scotland is bound by the same laws, Threadless lists a retailer in Edinburgh for example - but I've also heard people talking about buying shirts in Camden, etc.). Whether it's legal or not, people are doing it (and possibly out of simple ignorance - I never knew about these laws before these forums, they're not particularly intuitive).
Technically "Do not wash, buy new at Threadless" could be considered a washing instruction
Threadless tags actually vary from shirt to shirt - as well as the "buy new" one they have a "Crumple into a ball, hand to mom" one.
In general their tags, while amusing, don't meet the legal requirements that I've been told about.
I think it helps that the rules are pretty stupid and it's not like police are going to go around checking.
Still, it could get them in legal trouble.
But then so could the fact that they frequently publish copyrighted material, and even re-print infringing designs after the original print has been caught. I love what Threadless produce, but as a company they have a few highly questionable business practices. Their brazen attitude towards copyright infringement is starting to make me very angry.