I don't know reliable this is, but it sounds about right. I found it here: www-2.cs.cmu.edu/afs/cs.cmu.edu/user/wbardwel/public/nfalist/nfa_faq.txt
ATF has made the decision that a handgun (but not a machine gun,
since a machine gun is not also an AOW) with more than one hand
grip at an angle tot eh bore is an AOW. This is based on the gun
a) being concealable on the person, and b) not meeting the
definition of a "pistol" in the regulations promulgated under the
NFA, since they say a pistol has a single grip at an angle to the
bore. However, at least one federal magistrate has decided that if
the grip is added later, the gun is not "originally designed" to be
fired by holding in more than one grip, and thus putting a second
grip on a pistol does not make it an AOW. ATF does not regard the
decision as binding. The case is U.S. v. Davis, Crim No. 8:93-106
(D.S.C. 1993) (Report of Magistrate, June 21, 1993). The
prosecution was dismissed at the request of the Government before
any review of that determination by the trial judge.
B/C this was a ruling you won't find it written into law. Hell, I can't even find it on the ATF website. Kind of like they don't want you to know it exists. I wish it didn't (enough people - including machinegun dealers I know- are saying the same thing that I'm sure it's for real). I wish it didn't apply there's a nifty little forward handguard I'd like to put on my cobray M11 semi but I don't even buy it b/c I know I can't legally put it on.