@Riddle bro,
I know that. To say something is illegal, there must be consequences for doing that illegal thing. Thus far, i have not see any nor heard of any. It must also be defined by Nepal law. I don;t see that. 

Regardless what an NRN card is, it is a government initiative. So one can actually print the information there and hold the government to task for writing it. So in future when they question you, you can actually tell them "Oh I was about to surrender it but when i read the point number 1 for the NRN card, i thought the government was telling me too keep my passport. How else can you justify that statement if not?". 

The government officials will then blush and leave you alone.