That's perfectly legal. You're correct that you can't put a vertical foregrip on a pistol, but you can use the pistol however you want. There's no vertical foregrip in that picture, she's just holding the magazine well. And a mag well is not a vertical foregrip; it doesn't matter if the shooter uses the mag well as a grip, it's still not actually designed as a grip.
This is straight from the BATFE:
"ATF has long held that by installing a vertical fore grip on a handgun, the handgun is no longer designed to be held and fired by the use of a single hand. Therefore, if individuals install a vertical fore grip on a handgun, they are 'making' a firearm requiring registration with ATF’s NFA Branch."
Notice that the key word here is "designed". The BATFE can't control HOW you shoot the gun, they can only control how it's actually designed. And the Kel-Tec in that picture doesn't have a vertical foregrip, so it's completely legal.
It works the same way with the
SIG SB-15 "arm brace" that's designed for AR and AK pistols: It's officially designed for one-handed use by strapping the gun to your forearm. It actually sucks if you use it that way (it's much better if you just shoulder it like a normal stock), but the BATFE has officially determined that the SB-15 is an arm brace designed for one-handed use, so it doesn't matter how you decide to actually shoot the gun.
If it was illegal to hold the mag well on a pistol, then it would be illegal to use ANY kind of two-handed grip on a pistol: Keep in mind that the official BATFE definition of a pistol is a firearm that's "designed to be held and fired by the use of a single hand". But most people use two-handed grips when shooting pistols and it's perfectly legal, and that's because the BATFE can't control how you shoot a gun.