Surely that has to be illegal?
It's not. AFAIK there's no laws saying a gun has to "look like a gun." The only law is that fake guns have to announce they're fake (orange tip).
I have to say it's a bad-ass piece of engineering but it's a two-shot self-defense gun, so it's not like someone can go on a rampage with it. Unless I missed a part where they can reload the ammunition in the article Andy provided?