It's a liability even if it isn't illegal. Botch a draw in your backyard and shoot one over the fence into your neighbors yard and your life is going to change, especially if it causes some sort of damage or injury. Ricochet, deflections, he11, even a sneeze can ruin your day.
I'll occasionally step outside the law and shoot in my yard, for example when I want to chrony a new set of arrows or new draw weight, and I shoot 10yrds in my basement regularly with my bow, but I wouldn't make a habit of it in town.
"Better safe than sued"....