Yes and no. In the simplest sense, the teacher is allowed to grade the tasks. However, the teacher may not provide feedback to the student before the student makes their final submission. In other words, the teacher may not grade the student's work before final submission because that's giving feedback. The practice of grading PTs is even implied in CB's (College Board) email dated 4/17/2018:
My guess is the student believes it's "illegal" because he/she thinks the tasks should be only treated as part of the AP exam, and that the teacher cannot add additional influence by assigning a separate grade, possibly with additional/different criteria. I don't believe CB explicitly prohibits this, but the teacher must make sure the grading criteria they use do not implicitly violate other rules, such as "minus points if you choose autonomous car as your computing innovation" - since that would be similar to assigning or determining their topic, IMO.
I have to admit it's still a gray area for me. I interpret the rules to be we're not allowed to impose a specific timeline, but I know many teachers will dock grades if students don't have it submitted by a certain date. I feel this potentially goes against the rule, but it's a pretty open practice that I'm sure CB knows about and hasn't pushed back on, and realistically, many students will procrastinate and miss the deadline if these artificial deadlines were not imposed on students with the threat of their grades.
I'm partially responding to your question and partially voicing my own frustrations and concerns. Only slightly more than half of my students completely submitted both PTs. I went through this same disappointment last year and thought some changes I made this year would help, but I'm just as disappointed again. This year I imposed heavy grade penalties (among other changes) and it just resulted in tanking students' grades.