Yes, the ATF seems to make a distinction between something that makes the barrel/shroud bigger and something actually protruding downward that you can hold without gripping the barrel/shroud. On an unadorned AR pistol, you can shoot it while holding the barrel and it's still a handgun. Put something fatter on the barrel, and you get the same result. But when you attach something that you grip separately (the ATF has in some letters called it a "pistol grip), their position is that it no longer is designed to be held and fired with one hand.The Magpul AFG is allowed on pistols.
https://blog.roninsgrips.com/atf-letter-stating-magpul-afg-legal-use-ar-pistols/