That is very weird....
But with that setup it can still use a regular mag release and standard, albeit 10 round magazines?
You are correct, and this is the major point. New California proposed rules no longer recognize bullet button solution as "non-detachable" magazine; effective 01/2017 bullet button rifle with evil features becomes an assault rifle that requires registration. It would be logical to think that if you register your gun as an assault rifle then presence of bullet button and/or the number of evil features should not make any difference for the legal status of the gun. Unfortunately, it is not true: registration conditions do not allow you to change release mechanism (i.e remove bullet button). In order to register the gun you should keep it in the same configuration as of the moment of purchase and you cannot modify it after registration (you have to provide pictures of the gun).
If you go featureless you can use normal mag release.
By the way, you said "That is very weird...". Sure, however, it is surprisingly convenient.
With gen 3 Thordsen stock coming in June it will look better. It is not a Scorpion on the picture below, but one can get an idea.

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