In the books of the Harry Potter series, Rubeus Hagrid makes a Muggle child grow a tail of a pig. (He tried to change the kid into an actual piglet, but failed.) In the book it was never fixed and a later piece of dialogue implies that it had to be surgically removed. Was he allowed to do that?
In another book Harry "blows up" his own aunt, and the Minister of Magic himself seems to laugh at the idea that Harry would be punished.
We never learn of him getting any consequences for Hagrid's action. While some mention the rule of Voldemort being a sad time for Muggles, and I faintly recall one wizard expressing a feeling which implied that killing Muggles is a bad thing, they seem to be awfully frivolous with Obliviating people. Are there limits to what wizards are allowed to do to Muggles that wouldn't be done to a fellow wizard?