This isn't exactly new territory. A lot of countries are very careful to avoid letting you in on a tourist visa if you give off the appearance of entering to work.
I'm sure there is more of this than in Europe than I'm aware of (food delivery is one example we're recently had a lot of focus on in the UK) but it's certainly not at the point that it's routine and expected.
How does this work? Are these people somehow paying taxes regardless of their immigration status?
Also in states like California they let undocumented immigrants get drivers licenses. They can even get bank accounts and mortgages in some states (which is basically impossible here in Canada).
OP was asking how there's huge communities of undocumented people in the US and how they manage to work and live without legal status. Which would be an unusual thing in almost any country. The logistics of doing so is a valid question (how do you drive to work, how do you find housing, how do you get healthcare, etc). The answer is many state and federal policies support having millions of undocumented people in legal limbo indefinitely, by offering them pseudo-legal status or loopholes.