Above - I do know of quite a few people who live here without residency / NIE. One lady I know 15 years she has been here. We said to her SORT YOUR PAPERWORK OUT before Brexit - it is inexcusable to live in a country that long and not declare you are living there. Asking for trouble.
This also is not good for the area you live, as the REGISTERED population figures affect the local funding for the respective town/village - so if half the people are not registered, then the town (where said individuals may live) will suffer accordingly by not getting the money or only getting the money related to the number of registered individuals. There is no excuse to not register if you are living in Spain or have been for some time - ultimately it will affect the community you live in.