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Sure it's legal. You are only required to have single wall pipe indoors. I'm not sure how he gets more heat with the two 'vents' vs having the single wall open to the room.
I can't see the pics either, but if he's cut his own holes than he's modified mfg'ers original design and voided the listing. Whether or not it's safe is another matter, so long as he's maintaining single wall clearance there shouldn't be any problem. In addition depending on what he's done to the airflow within the pipe there may not be a problem even if he's only maintaining double wall clearance. The big problem is like I said, he's voided the listing and if there ever were any mishaps then the manufacturer couldn't be held liable and he could possibly have an insurance claim denied. I don't think that happens very often though, I've never seen an insurance claim denied even in cases of extreme owner negligance.
Those holes look "stock" to me. I can't recall the brand name but there is a doublewall pipe out there with the slits in it like that. The amount of "free" heat, in my opinion, would be negligable. Kind of like some people still swearing by the magic heat exchangers.
Heat exchangers are a box with tubes running horizontally through it, and a fan that blows air through the tubes. The box mounts in your chimney. They do work nicely. Only trouble is sometimes they can cool off your chimney too much, causing excess creosote build-up and trouble cleaning the chimney.
its stock , i have some in my garage (not installed , just sitting ) that have the same vents. so its listed that way and is legal if installed within manufacturers parameters