Kel-tec lists muzzle velocity at 2600fps, Out of a 'standard' length barel, .223 should be somewhere around 3300fps. So yeah, you could get more out of this round in a longer barel. Same is true of .357Mag when comparing a 2" snubby .vs. a carbine length rifle.
In reality, I'm sure it'll be a real flame-thrower
I'll be the first to conceed that this is not a _practical_ general purpose weapon, but having shot an Olympic .223 pistol, I'm sure it'll be a _fun_ one! Weighs almost half of the olympic .223... and costs about half, as well.
According to ktog, it's available now. Some of the accessories (muzzle brake, etc) aren't yet available. It's really just a SU-16D9, with a pistol grip (and no NFA SBR tag required)