In answer to your question, and I didn't look up the regs, but as long as your weapon with the stock extended is long enough to make in a title 1 weapon (non-SBR) then you can shoot the rifle with the stock folded if you wish...
Now, there are special reinforcement plates designed to help adsorb the energy from this and it sure isn't good for the gun if it was not designed and reinforced for pistol style shooting...
http://www.quarterbore.net/forums/showthread.php?t=524
Good Luck!