I seriously question the legality of all this, and I know that I'd have trouble following any policy that the powers that be won't push into official status. Hell, even questionable official policies have been trumped by questionable legality. (I'm thinking of my NAPS class, the no drinking policy, and a JAG-snuffed witch hunt by the command.)
Now, I know that They can (if they haven't already) word MIDREGS however best suits their desired endstate, which will most likely read something along the lines of, "...[E]very Midshipman is considered to be in a duty status, regardless of the time of day or location." The problem with this, though, is that they're encroaching on the "On Liberty" or "On Leave" status of individuals. While granted by the Commander, Liberty is a lot harder to legally restrict than some people realize, and people who have wrongly gone down the road of infringing on it--albeit with the best intentions of maintaining good order and discipline--have wound up in plenty of hot water.
What happens if a Mid whose family lives in Annapolis gets torqued while on leave, and in the course of showing some midhound around the Yard, gets pinched by Jimmy Legs? Let's say he blows a .16? What about that? I think if you charge him, you're going to have to charge everyone who got fucked up while on leave. I'm not sure that's legal, considering that you cannot technically be on duty while in a leave status.
But I'm sure if there's a way to cover their own ass while screwing Mids over, the USNA will find a way.