An illegal move is completed once the player has pressed the clock (Art. 7.5.1); The position immediately before the irregularity is reinstated; First completed illegal move: the arbiter gives two minutes extra time to the opponent (Art. 7.5.5)
Why people argue about this
People often assume that once an illegal move is made in chess, it's simply ignored and play continues as if nothing happened. However, they misunderstand that the position before the irregularity is indeed restored, but with a penalty: two extra minutes are added to the opponent’s clock for each completed illegal move, which can be quite frustrating and time-consuming for the victimized player.