The wording of the law was originally 30", but due to the underfolder stock AKs being less than 30" long when the stock was folded, they were forcing owners to register a 16" barrel legal federal law rifle as a pistol.
As is often done with laws, they are used as written, so some people were carrying the underfolder AK as a concealed pistol since they were forced to register it as such. The law was then changed to 26" as a direct way to stop the registration of underfolder AKs as a pistol, and as a way to stop CPL holders from carrying them. There was a legal notice issued at some point on the subject.
I believe that PSA is misinterpreting the law, as many dealers sell AK pistols of varying lengths, as long as the barrel is less than 16", and no stock, it's a pistol.