NHRA wheel stud rule ? A litle confusing

"The thread engagement on all wheel studs to the lug nut, or lug bolts to wheel hubs, must be equivalent to or greater than the diameter of the stud/bolt. Length of the stud/bolt does not determine permissibility. (Example: A 7/16-inch stud must be thoroughly engaged through the threads in the hex portion of the lug a minimum of 7/16-inch.)"

The way I interpret that and the way that the rule book graphic shows is that your stud must protrude at least the diameter of the stud itself. So if you have a 1/2" stud, you'll need 1/2" of it sticking out past your wheel surface. Just as you said.