“There’s no replacement for displacement.”
The 25 and 32 fit a lot in short magazines because they’re small diameter - a lot stack up without getting very tall. They are pitifully weak because they are small diameter and short - no case capacity. If you add case capacity, you have to either get fatter, which means less rounds in the mag, or get longer, which only works for the diameter of a grip the human hand can actually hold. Ever held a Desert Eagle, Coonan, or PMR-30? The grips are huge to fit their over length cartridges.
Long, skinny cartridges just don’t work well.
And then we can move from internal to external ballistics, and terminal ballistics. Handguns don’t kill in the same manner as rifles, so extra speed doesn’t do much for performance. Just adds recoil. The skinnier rounds will lose penetration because they lose frontal area and bullet weight, and lose stopping power because of reduced momentum transfer. If you increase bullet weight, they get long and steal case capacity, then still don’t stop as well as a slower, larger dia bullet because that extra weight just yields penetration, not momentum transfer.
Then there are market influences - like component availability. What bullet supply are you going to draw from for this? When the 32H&R came back, there weren’t many (any) good bullets for it. It took a long time to get market support for a handful of good bullets for it. Then the 327FM happened - same deal. Look at how few bullets do anything in .357sig which they don’t do in 9mm - because they are 9mm bullets crammed into a larger case which pushes them too fast. When the 6.8 SPC came out, there were a lot of .277” bullets on the market, but they sucked for 6.8SPC because the jackets were designed to expand at 270win velocities. What source of .277” short ogive, round nose, hollow point, soft point, FMJ 80-100grn bullets are you going to use for this low velocity, short case cartridge? Your doodle in the OP shows a truncated long ogive rifle bullet, who’s going to start making that bullet for this ONE pistol cartridge in this ONE pistol?
Using the PMR-30 and Five-Seven as evidence to support a novelty pistol like this. I would venture more Glock 19’s are sold every year for the last 30yrs than the entire volume of PMR-30’s and 5-7’s combined EVER. They’re niche market toys with incredibly low market access.
This is all REALLY BASIC ballistics. It sucks when you realize your idea just won’t work, but it happens far more often than anyone invents something novel and innovative. Sucks your namesake won’t pan out, but dust off and come up with something else.
Kel-tec also isn’t an ammunition developer. They produce some niche firearms, and do so at very low prices, and at reasonable qualities. Ruger commands a much, much higher market penetration, and has collaborated on numerous cartridge development processes in the last ~20yrs. If anyone was going to bring a new cartridge to life, it wouldn’t be Kel-tec.
Your boat is sunk at the bottom of the river, quit rowing. Swim up, build a better boat, try again.