There were several things structurally different about the middle ages that led to the naming of the 'wolf' interval, or 'diabolus in musica' (the devil in music) as it was also referred to...
First, the music of the middle ages wasn't polyphonic, so these intervals occurred melodically, rather than harmonically
Second, it's not the same interval we play today. Â They didn't have equal temperment (or its predecessor, well temperment), so the interval C-F# wasn't the same as C-Gb.
In our tuning systems today, we measure chromatically in half steps, and each half step can be divided into 100 increments called 'cents'. Â Having 12 tones in a chromatic octave, the wolf interval is 600 cents above the tonic.
If we rely on Pythagorean tuning, F# is 588 cents above C, and Gb is 612 cents above C... a difference of almost 1/4 of a half step between the two!... so the wolf interval sounded a lot more out of tune then than it does today.
It's also incredibly difficult to sing, which is probably the major reason it was avoided -- the vast majority of music in the middle ages was vocal.
Unfortunately, I don't read Latin or Greek, and I don't have any primary resources dated before 1725, so I can't definatively say if it's legend or not... but in modern translation I find references to this interval's use for composition dating back to 1555. Â As this roughly corresponds with efforts to create a temperment system, I suspect that the use of 'wolf' intervals came about because they weren't the same sound as they were a few years earlier!
I don't find any prohibitions, just cautions against using them. The earliest one I've found dates to the early 1300s, with Jacobus of Liege.
Guitar teacher offering lessons in Plainfield IL