Obviously, both law enforcement and the boating community appears to be a little confused about the issues. Note: This discussion pertains to NYS law, as per the thread title. Other states may or may not have similar laws, check your local listings.
1.) Repeat after me: Silent Choice is not a switchable muffler. Silent Choice routes the exhaust below the water line and through the prop hub, making the exhaust for all intents and purposes silent. A switchable muffler is a muffler than can be rendered inoperative at the flick of a switch.
2.) The law as cited above is surprisingly clear: You may not "bypass or otherwise reduce or eliminate the effectiveness of any muffler or muffler system installed." Installing a Silent Choice system does not eliminate the effictiveness, the opposite is true. If there is a muffler system and you are bypassing it to reduce its effectiveness, you are breaking the law. If there is no muffler system, then the person or company who has sold you the boat has probably broken the law. If you then install a switchable muffler, you are not breaking the law. But:
3.) The point above is quickly moot, because "no person shall operate or give permission for the operation of any pleasure vessel in or upon the waters of the state of New York in such a manner as to exceed a noise level of 90dB(A) when subjected to a stationary sound level test as prescribed by SAE J2005 ... or as to exceed a noise level of 75dB(A) measured as specified in SAE J1970." And herein lies the rub.
Both test procedures are notoriously hard to implement and tickets issued with references to these procedures usually do not hold up in court. A detailed discussion would be very technical and besides the scope of this post. Suffice it to say that the University of Michigan concluded that "the testing procedures given in SAE J2005 and J1970 are both impractical and nearly impossible to enforce in practice. These procedures, even in the hands of trained, experienced officers do not provide representative, repeatable, easily conducted measurements of vehicle operating sound."
This is good and bad news.
The good news is that with knowledge of the law, the authorities can be kept at bay. Challenge an officer to conduct a test according to SAE J2005 or SAE J1970 and he will most likely back down, because he doesn't have the equipment, the training, or the time to back up a $50 ticket, which the court will most likely throw out if you promise to fit mufflers. You will notice that there is an increasing number of reports about law enforcement stopping boaters because of noise violations, but very little reports about actual tests. Whipping out a dB meter is not a valid test as far as the SAE is concerned.
The bad news is that youb are not the only one who knows that. These regulations are about to be replaced by much tougher, much more enforceable regulations. If you think these laws are bad, then look to California. Their new laws are so tough that pretty much the only way to comply with them is with permanent below the waterline exhaust. And trust me, there is someone in your state who is right now working on bringing these regulations to your state, sooner than later.
Whether the rest of the country will have California-style laws or not is also in our hands. We can provoke it by running open exhaust all day and night long. Or we can delay it by observing the laws that are on our books. One of the best arguments against new laws is: "We don't need them. We need to observe and enforce existing ones."
Which means: Put a muffler on that boat. There are new ones that do not degrade performance in any way. Cost: About two or three tanks of gas. Those who won't listen (they probably lost their hearing anyway) are killing our sport by bringing CA-style regulations upon us.