This issue pops up from time to time. Surprised it's still questioned.
As long as you're playing your instrument (and/or singing) there's no "cheating" about it. BIAB is merely filling in for the instruments the establishment doesn't want to pay for.
Actually, even if they did I'd still prefer playing my guitar with BIAB behind me. I don't want to sit there all night comping while the pianist plays the melody and then he and everyone else takes endless solos. With BIAB, I play the melody and I take all the solos I want. No complaints from the band! (None from the audience so far either). Best of all worlds!

Cheers! -Alastair