It is two issues.
The first is that it is restricted if folding, telescoping or other. Meaning if you can push a button and make it shorter than 26", it is restricted. A pistol grip must be installed with tools, just like removing the buttstock. By removing the buttstock you are also creating a gun the can be fired at less than 26" so the provision in practical terms is no-tools = restricted, tools= non-restricted.
The second is; are you creating a handgun by installing a pistol grip on a pump shotgun? FRT lab says yes if the barrel is less than 16". This is the subject of the court case. 16" was a figure pulled from US law, BTW. It has no basis in Canadian law. It is basically an arbitrary figure.