I have been doing some testing with the 17m2 as far as function and safety goes. Here is some fun stuff for those of you who were wondering about this round.

If fired from a 22LR barrel, they are extremely quite but dont have much power and cant cycle a bolt at all. Did not test for accuracy. No case spliting.

If fired run in a Ruger mag they work good. So far the dry cycling in a WMG mag works great. Cant wait to try with a R22. If these work with a full mag that will be pretty neat.

If run in any sort of a bannana mag they dont work. They will jam deep inside the mag.

RhinelandArms,
    I relined two used 10/22  22lr barrels I got from the EE, one is chambered in .17 Aguila and one in the 17Mach2.  The 17 Aguila works great in the 10/22 with just some weight added to the bolt handle -- the 17Mach2 required a little more work but it shoots really nice too.  I didn't try the Aguila at the range yet but the Mach2 will shoot 0.5" at 50 yards using a 3x9 power scope and most likely can shoot even better. Both rounds work really nice in the ruger magazine but I know the Aguila won't work in one of those hi-cap mags but I have not tried the Mach2 in a hi-cap yet -- having too much fun just the way things are now! I read that the 17 Aguila can be fired in the 17 Mach2 chamber with little loss in accuracy so I tried it. It's kinda strange -- the Aguila will shoot in the Mach2 OK and the cartridge doesn't get fire-formed out for some reason! The accuracy was not as good as with the Mach2 round.

EDIT TO ADD; I tried the same thing you did and stuffed a 25 round Butler Creek mag full of .17 mach2 rounds. it seemed to work ok for the first 4 or 5 rounds then it started jaming. Seems that as the rounds are loaded the nose starts to tip down and they don't come back up as they reach the feed lips.