(1) It is unlawful.
(2) Yes, this is makrooh-e-tahrimi; since in hidden matters the visible matter is regarded as reason and the ruling evolves around the same. As in journey, the reason of shortening salah is trouble, but trouble is a hidden thing, therefore just journey was given the place of reason. So, now one has to shorten his salah if he travels to a distance of safar whether he feels trouble or not. Similarly, sleeping does not basically cause breaking of wudhu but the main reason is loosening of joints leading to breaking wind, but it was difficult to realize it so the apparent thing i.e. sleeping was made the reason. Likewise, pride or arrogance was the main reason but it was hard to realize it; therefore wearing cloth below the ankle was made the reason. So, now wearing cloth below ankle will be will be makrooh-tahrimi.
(3, 4) Arrogance was a hidden matter, but since this is the clothing of the arrogant, therefore it warned in the Hadith:
عن ابی ھریرۃ قال: بینما رجل مسبلا ازارہ، فقال لہ رسول اللہ صلی اللہ علیہ وسلم: اذھب فتوضا ثم جاء فقال: اذھب فتوضا، فقال لہ رجل یا رسول اللہ! مالک امرتہ ان یتوضا ثم سکت عنہ ثم قال انہ کان یصلی و ھو مسبل ازارہ وان اللہ تعالی لا یقبل صلاۃ رجل مسبل (ابوداود: 2:565، رقم الحدیث: 4086، کتاب اللباس، باب ما جاء فی اسبال الازار)
Allah (Subhana Wa Ta’ala) knows Best
Darul Uloom Deoband