If I'm not mistaken the 20" barrel with the 55grn bullet is part of what sold the military on the Mr. Stoners design to begin with. The wounds were pretty impressive. As you are discussing, hydrostatic shock plays a big part of this. The original 55grn hollow nosed FMJ tip would deform and yaw violently upon impact creating wound channels equal to, or in most cases in excess of more powerful .30 cal. rounds.
The Soviets had the same idea with the 123 grn. 7.62X39 but the velocity wasn't there to produce the more explosive yaw action that a lighter bullet with more velocity will give.