Andy, your brain is stuck firmly inside the box...we're talking the forest here, you're looking at one tree.
Forget the specifics of the picture above, keep in mind only the concept. Here's "the dumb kid" explanation (though I know you're a smart guy):
We unscrew the knob. We screw onto the shaft a piece of aluminum that's about 18" long with a bend about 1/3 of the way. The longer part extends about a foot backwards and hangs in the air.
Shift knobs are free. So is this extension. Let's go further.
I really don't like having that lever hanging out in the breeze so I'm going to attach a vertical support on it; the bottom of that support will rest on the trans tunnel.
Shift knobs are free. So is this vertical post, as it's part of the knob. Let's go further.
I decide I want that vertical post to pivot on the end of the extension, well because I want to. And I'm going to attach the bottom side of that vertical pivoting post to the trans tunnel using existing holes and/or threaded inserts in the trans so I'm not modifying any part to install it (and fasteners are free). And, I'm going to put a swivel on the end of the part that screws onto the shift knob, too, cause I want to.
Shifts knobs are free. Nothing past the "any shift knob may be used" further limits what I can do. So, it's legal.
Remember the discussion about writing rules? About when something's "free" it's "free"?
Point One: as long as that design attaches where a shift knob would normally attach, it's allowed. I can attach and elephant ear on that thing if I want to, the rules specifically allow that.
OK, so that aside, let's address your comment about "If that shaft is modified in ANY WAY beyond being bent...which it clearly is...[it's illegal]." I disagree with you on this point, also, simply by current and traditional interpretation of the rules.
For example,
show me where modifying the factory steering column in order to install a steering wheel - including welding, cutting, shaping, and or drilling - is legal to the Improved Touring regulations? It's not. Yet, we've "agreed", traditionally, that modifying a stock part in order to install a legally-installed part (e.g., welding on a steering column adapter to install a steering wheel) is in fact legal. Note that the shift lever rule does NOT state 'the
only modification allowed to the stock shift lever is bending it', it states that bending is allowed. And, if you revert back to IIDSYCYC claiming that you cannot modify the shift lever, then you also have to also agree that modifying a stock steering shaft to install a quick-release is also legal...
Point Two, since a steering column can we welded on and/or drilled in order to install a legally-allowed replacement steering wheel, then welding, drilling, and or modifying the stock shift lever in order to install a legally-allowed shift knob is also legal.
As I've said many times in the past, rules mean things, and when things are allows in one place, they are allowed in other unintended places.
I am fully of the mindset that while the system indicated above is not within the original
intent of the rules, it's absolutely freakin' allowed within today's
letter of the rules...and if it can be designed without modifying the stock shifter shaft - which is CLEARLY can be - then it's a slam-dunk. - GA

If it was attached by a chain, would GA yank it?

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Ooooh, you're mean....
