H1b got rejected. If I appeal, does it mean during this waiting time, my status is legal? I had OPT before.

Since your OPT expired ... stop working ... immediately. Talk to the lawyer that did the H papers to see if there is an RFE or appeal possible. You currently have no status and ... depending on how the denial is written, you may be accruing unlawful status. Meet with the company's immigration lawyer ... not someone in HR .. not an immigration 'team' ... a real live lawyer.

Filing the appeal will not extend your legal stay, and you will accrue unlawful presence. If your appeal is sustained, you will not accrue unlawful presence. You also have to stop working. Please hire an attorney and have him/her review the denial letter.

Hire a business immigration attorney to review your options. Most likely if the rejection came without request for evidence (RFE) you will have to leave the country in order to not accrue unlawful presence. In this case of true "rejection" there is no way your appeal will take less than 6 months which will put you in the 3 year bar category or 10 year bar if you overstay more than 12 months if you ever to depart USA. If you leave you still have a chance to appeal the decision (rejection) or answer RFE and get an approval. In this scenario you can go to your local US consulate and request an interview for H visa. In any case don't rely on company's HR people to advise you on your options.