If the linked blog contains the truth (which the lawsuit will determine) then this clearly appears to be the tyranny of a petty individual in a position of bureaucratic and law enforcement power. A sadly familiar situation, although this example is more extreme than most.
As to the assault weapon law, rumor has it that when they were selecting criteria for the banned features, they got a copy of the Shooter's Bible (some say with the Shotgun News) and picked out the guns that looked "evil" and compiled the ban features to include as many of them as possible.
As to the current charges, it will boil down to the court (always the best determiner of technical issues
) to rule if the pinned stocks are in compliance with the law, in both fact and spirit.
In other words, how "readily comvertable" can something be, and still be in legal compliance. There is nothing you can do to a firearm that still leaves it functional that cannont be "undone" if you are prepared to do enough work, and it can all be done with hand tools, if you are dilligent enough.
The tape of the undercover agents being told what they were arsking about was against the law, and so on, seems pretty good evidence in favor of the defense, that the dealer was following the letter of the law. Wonder if it will make it into court?