X-Out / Practice balls - Competition Legal?

Balls marked practice are fine as long as they are on the conforming list. These are viewed the same as logo balls.

Have a look at decision 5-1/4
 
X-out are a no-no ... seem to remember posting a quote from Titleist website explaining this, as they are effecting failed balls.
 
X-outs are a little more complicated...

X-out' is the common name used for a golf ball that a manufacturer considers to be imperfect (usually for aesthetic reasons only, e.g. paint or printing errors) and, therefore, has crossed out the brand name. A 'refurbished' golf ball is a second-hand ball that has been cleaned and stamped as 'refurbished'.
In the absence of strong evidence to suggest that an 'X-out' or 'refurbished' ball does not conform to the Rules, it is permissible for such a ball to be used. However, in a competition where the Committee has adopted the condition that the ball the player plays must be named on the List of Conforming Golf Balls (see Note to Rule 5-1), such a ball may not be used, even if the ball in question (without the X's or without the 'refurbished' stamp) does appear on the List.
In most cases, 'practice' balls are simply listed, conforming golf balls that have been stamped "Practice", in the same way that golf balls often feature a club or company logo. Such balls may be used even where the Committee has adopted the condition that the ball the player plays must be named on the List of Conforming Golf Balls.
 
USGA FAQ

Do X-out balls conform?
All golf balls that are sent to the USGA for conformance evaluation, that are tested and found to conform to the Rules, are published on a monthly basis on the USGA's Conforming Golf Ball List, which can be found at Conforming Golf Ball List. X-out balls are normally not submitted for conformance and are not considered representative of balls with similar markings that may be on the List. As a player, you should check to see if the Conforming Ball List is in effect as a Condition of Competition at your club or event. If it is not, a golf ball may be used under USGA Rules of Golf provided it is not obviously non-conforming or advertised as such (see Decision US/5-1/101 - Status of Ball Not on List of Conforming Golf Balls, in the Decisions on the Rules of Golf).
 
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