As I understand it:
The PLR22 is classified as a pistol. Any magazine "designed" for the gun must therefore be limited to 10 rounds.
However, the PLR22 accepts magazines designed for AR .22 conversion uppers. As .22 rifle magazines these have no capacity restriction and most hold around 26 rounds, give or take. Since these mags are not "designed" for the PLR22 they can be used in that gun.
This is similar to two other situations:
Even though semi-auto centre fire rifles are limited to 5 rounds, the LAR 10 round mag can be used in an AR because it was "designed" for a pistol, and pistol mags can hold 10 rounds.
Even though the Ruger Charger is classified as a pistol, a 25 round 10/22 rifle magazine (except for Ruger's own, which is prohibited) can be used in it.
In actual fact, all this is somewhat of a grey area caused by the ambiguous and fundamentally absurd firearms legislation.