Personally, I really like the look you probably have in mind, the minimalist bobber, and on a R3 I think it would pure sex.
I just can't imagine doing that to 1 of 500 of what is very possibly going to be the last special edition rocket ever made... On the other hand, I would immediately replace the exhaust and intact work, add a small screen and probably put on BST wheels as the first big money upgrade for 18" rubber, and that's more than many feel is ok for a collectors edition.
Concerning legality, almost every us state requires vehicle certification after frame work as proposed, however, VERY few actually enforce it, even the ones that require a safety check/inspection would probably miss the frame hack if done right.
That said, if you must proceed, notice that the two pieces of frame extending slightly past the cross bar form a box shape where they are welded together. If I were doing this, I would hack it just behind the crossbar, and weld in a steel box tube, maybe a 1"x2" piece, crossbar to reinforce that little dinky round cross member so the 2" orientation is top to bottom and 1" in the front to back direction relative to the bike. This way you would provide torsional strength and side load strength.