No comment on legality of insert, I'll leave that to
@bholler. But I did grow up in a rather large house with several fireplaces, and did attempt to heat the joint with them, one winter. What I learned is that you can indeed heat the room you are in with a fireplace, don't believe anyone who tells you otherwise. In fact, the one my father had installed in the 1980's threw so much heat it could too-easily roast us out of the ~1000 sq.ft. space in which it was installed. But it all comes at the cost of drawing massive amounts of make-up air thru every nook and crevice in the rest of the house, such that rooms distant from said fireplace go dead cold.
The other problem with a fireplace is the ~12 hour window of time between when it stops putting out sufficient heat, and the fire is actually burned out sufficiently to safely close the damper. You lose enough heat up the flue in that window of time, that the appliance may actually become a net negative on heat production (or so I'm told).
The two rules I Iearned to keeping a house heated with fireplace(s) were "many" and "often". Keep several going, and never let them go out. That said, I still find open fireplaces very appealing. Nothing compares to the sound of an open fire, wood stoves and inserts are a very poor and distant facsimile.