Wallet Pistols are an oddity. They seem silly and practical at the same time. Safety seems compromised for the speed of being able to shoot the pistol while it is still inside the wallet/holster. However it’s classification is what I find even more perplexing. Yes this is another head scratching ATF NFA issue.
Take a close look at the pistol below. Looks rather similar doesn’t it? However this and the one above it are not the same. They function the same in all manner of practicality but there is one major difference. The slide is exposed. This is no longer considered concealed and there for is not an NFA item.
So what does the screen shot above mean? If you want a wallet holster you can have one. You cannot put a pistol inside it unless that pistol has been registered as an NFA item. Turn your pistol into an NFA item on your own? Pay the ATF $200. Take that exact same pistol to an FFL who can turn it into an AOW and you only pay $5 to transfer that pistol back to you.
Does it make sense? No. But it is the law.