I am not a lawyer or an expert but an enthusiast. If someone better versed on the legal history of this issue would like to add their knowledge, I'd appreciate it.

pistols designed to chamber rifle shells and pistols designed to chamber shotgun shells

The ATF does not define a weapon's type by the ammunition it fires but rather by the features of the weapon itself. There are many rifles that are chambered in pistol calibers (pistol caliber carbines) and many pistols chambered in rifle calibers (including the Thompson Center Contender). Instead, the ATF usually defines the type of ammunition by the type of firearms that use it. This has led to intermediate cartridges such as 5.45x39mm 7n6 being banned as "armor piercing pistol ammunition" despite being used primarily in rifles. There have been similar attempts to ban some cheap steel-core 5.56x45mm M855 ammunition with similar justification but their popularity has made doing so difficult.

what laws and historical court rulings allow the manufacture & sale of such weapons

Pistols capable of chambering shotgun shells fall into a different category than short barreled shotguns because of the legal definitions of each. These definitions were set by the National Firearms Act of 1934 and are interpreted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives. The restrictions present in the NFA were intended to put a de facto ban on full-auto firearms and concealable weapons, including pistols. Before the act was passed, "handguns" were removed from classification out of fear of the act being declared unconstitutional. For this reason, most of the restricted categories are based on the size and concealability of firearms to close loopholes circumventing the intended ban on pistols. This is why many of the restrictions are able to easily skirted: short barreled rifles and shotguns may be classified as pistols to avoid the restrictions on concealability. For this reason, the ATF definitions of different types of firearm appear arbitrary to many observers.

A shotgun is defined as follows:

Defined Under: 18 U.S.C., § 921(A)(5) and 27 CFR § 478.11

A weapon designed or redesigned, made or remade, and intended to be fired from the shoulder, and designed or redesigned and made or remade to use the energy of the explosive in a fixed shotgun shell to fire through a smooth bore either a number of ball shot or a single projectile for each single pull of the trigger.

Because of this definition, only weapons designed or modified to be fired from the shoulder are legally considered shotguns. This includes weapons that are otherwise identical to shotguns but have never been fitted with a shoulder stock, including weapons such as a "Pistol Grip Only Shotgun" which is defined by the ATF as a "firearm". "Firearm" is the category used for all firearms that do not fall into any controlled category. In order for a shotgun to be classified as such, it must have an overall length in excess of 26", otherwise it will be classified as "any other weapon" and a be subject to a $200 tax stamp and $5 transfer fee. "Any other weapon" is a category used to restrict concealable firearms that don't otherwise fit into the existing categories. An example of a short shotgun in this category would be the Serbu Super Shorty. It is functionally identical to "pistol grip only shotgun" but due to its smaller size it falls into a more restricted legal category. These are defined by the ATF as AOWs because of their smooth bore.

Firearms such as the Taurus Judge which you refer to in the OP are not classified as shotguns at all, but as handguns. This is because they have a rifled bore. If you look at the image, you can see the chambering (that is, the caliber the gun is designed for) written on the barrel. It is chambered for both .45 Long Colt and .410 Bore. It is a revolver that happens to chamber and fire shotgun shells.

The ATF has freedom to interpret the laws to some degree. It does this through sending opinion letters on the ATF's interpretation of firearm laws to individuals and companies inquiring about categorization. The government usually defers to the ATF's interpretation but the ATF is occasionally legally rebuffed by the courts.

For an example of their interpretive powers, a "shotgun" is generally excluded from the "destructive device" category (which includes firearms with a bore over .50, covering most shotguns) due to the "sporting purpose" clause. Shotguns tend to get an automatic "sporting purpose" exemption, but this exemption has been removed for firearms in the past that the ATF has determined to have no "sporting purpose" such as the Street Sweeper shotgun. When the sporting purpose exemption was removed, owners had to register their firearms as "destructive devices" and they were subject to a tax stamp and transfer fee. However, due to no longer being classified as "shotguns", cutting down the barrel no longer constituted creating a "short barreled shotgun" so many owners did just that. The ATF could choose to classify "pistol grip only shotguns" that don't fall into the AOW category as destructive devices if they chose to, but the effect on crime would likely be minimal.

If I were to speculate, the ATF likely deprioritizes restricting weapons such as the Taurus Judge because doing so would be legally tenuous and a poor use of resources. A handgun that fires shotgun shells is no more dangerous than a standard handgun, and the vast majority of crime and weapons trafficking involves standard handguns. Pistols are preferred due to their concealability. In absence of a handgun ban, the NFA concealabilty restrictions lose their intended purpose. As interest in these categories of weapons increases, manufacturers seek to comply with the letter of the law rather than the spirit of it.