So you’re picking the last statement and ignoring the first... yup, makes sense...
badkarmamib is correct. Not picking & choosing.
To understand the issue, you have to look at both the definition of an AOW and of a Pistol. And it's generally best to go to the actual text of the law. I've seen too many times where some details are either omitted or embellished. So if you don't like what I write, please refer to the actual law and form your own opinions.
AOWs are defined under 26 USC 5845(e):
https://www.law.cornell.edu/uscode/text/26/5845 It gives a list of features a firearm needs to have to be considered an AOW. But as pointed out, the definition includes: "
Such term shall not include a pistol..."
So by definition, if the gun is Pistol, it cannot be an AOW.
So what constitutes a pistol? For that you want to read 18 USC 921(29)(A):
https://www.law.cornell.edu/uscode/text/18/921
(And then read 27 CFR 478.11, which defines a Handgun with the same wording:
https://www.law.cornell.edu/cfr/text/27/478.11)
That defines a pistol as "
a firearm which has a short stock and is designed to be held and fired by the use of a single hand..."
So, is the gun in question designed with a short stock (handle), and is designed to be held and fired by one hand? I would say it does meet that definition. So if it is a Pistol, it cannot be an AOW. Now if you did not have to fold the handle out to shoot it, one could argue it does not have a "stock".
I believe ATF has published opinions on this with regard to the stock being at an angle to the barrel. But I can't find them at the moment.
For a similar example, take a look at the Stinger pen gun. A typical pen gun is an AOW, not because it is concealable, but because it does not have a "stock". It is a straight cylinder. One exception is the Braverman Stinger, which one has to fold at an angle in order to cock and fire. ATF determined the folded section was the "stock", so it then met the definition of a "pistol" and was not an AOW. A typical non-folding pen gun is an AOW. The cell phone gun seems to be working under the same sets of definitions.