This species has long been mixed up with Hydnellum scabrum and H. glaucopus, and its taxonomy and ecology have only recently been clarified (Nitare et al. 2021).

Hydnellum illudens is an ectomycorrhizal fungus in older forest in the boreal and temperate biomes in Europe and North America. It forms ectomycorrhiza with spruce and pine, probably also oaks, on calcareous or somewhat base-rich soils, often in sandy and dry places. Being an ectomycorrhizal fungus, the main threat to the species is clear-cutting as its mycelia withers and dies the in absence of living trees, although forest fertilisation is an additional threat. The species seems to have a narrow ecological niche and special requirements. The old-growth habitat of H. illudens is thought to have decreased by more than 30% over the past 50 years (three generations) and probably more than 50% over the past 100 years. The decline of the population is suspected to be at a similar rate. Therefore, it is classified as Vulnerable (VU).

Hydnellum illudens is a rare species, long mixed up with H. scabrum and H. glaucopus as its characteristics and special ecological characters were only recently clarified (Nitare et al. 2021). Beside the type locality in France, it is well known in Sweden, Norway, Finland and Estonia (Nitare et al. 2021, GBIF 2024). It is also confirmed from United Kingdom, Switzerland and Italy. A sequence from a sporocarp from British Columbia proved to be H. illudens (Nitare et al. 2021). Therefore, the global distribution is unclear.

Hydnellum illudens is known from approximately 100 localities in Fennoscandia and the total number of localities in this region is estimated to be approximately 300 (Hyvärinen et al. 2019, SLU Artdatabanken 2020, Artsdatabanken 2021). As the species has been confused with H. scabrosum, the number of localities may approach the same number in the rest of Europe and similarly in North America. The total number of localities (including undiscovered ones) may thus approach 900, usually with small subpopulations of 1-10 genets (corresponding to more than 20,000 mature individuals, cf. Dahlberg and Mueller 2011).

The population of H. illudens in Fennoscandia is considered to decreasing throughout its range, mainly due to the impacts of forestry, and potentially forest fertilisation. Appropriate calcareous old-growth forests are estimated to have decreased with between 30-49% during the past 50 years (three generations)  and projected to continue at similar rate (Nitare 2006, SLU Artdatabanken 2020, Artsdatabanken 2021). The decline of sites with H. illudens is suspected to be at a similar rate. The status and trend of the population in the rest of Europe is probably similar due to similar impacts of forestry. The situation in North America is still unclear, but is treated here as similar to Europe.

Hydnellum illudens is a rare ectomycorrhizal fungus associating probably with both Pinus and Picea on calcareous or somewhat base-rich soils, often in sandy and dry places. H. illudens is an indicator species of seminatural and natural old dry conifer forest on calcareous soil of high conservation value. It may possibly also be present in hardwood forests as sequenced Italian specimens were collected under Quercus ilex and Q. suber, which is also the normal habitat for Sarcodon cyrneus (Nitare et al. 2021). The possibility that H. illudens can associate with Quercus trees implies that ecology alone may not suffice to separate H. illudens from H. lepidum. Mycelia of this ectomycorrhizal species may potentially be very very long-lived.

It is primarily threatened by clear-cutting of old-growth pine forests and potentially of nitrogen fertilisation of forests (Nitare 2006, 2023). Being an ectomycorrhizal fungus, the main threat to the species is clear-cutting as its mycelia withers and dies the in absence of living trees. In Scotland, where the species has been systematically searched for, it has only been found in remaining natural pine forests and never in planted stands. The species appears to have difficulties re-establishing itself after clear-cutting, probably due to a combination of it being rare and suboptimal habitat for re-establishing in planted forests.

The species is not known to be used.

Hydnellum illudens is nationally assessed as Vulnerable in Norway and Sweden, and as Least Concern in Finland (Hyvärinen et al. 2019, SLU Artdatabanken 2020, Artsdatabanken 2021). Protection of known sites is required. It may survive well in areas with forestry using carful selective cutting methods, so work for appropriate land management may be useful. Research is also desired to gain a better understanding of its ecology, in particular its population biology. Basic knowledge of if and to what extent it it may survive and re-establish in areas subjected to forest management may also facilitate a needed better management of this species.