Okay that's fair I didn't quite understand the statement, however you CAN distill as long as you REGISTER YOUR STILL for free via a permit application from the Tobacco and Alcohol Tax and Trade Bureau with the US Department of the treasury, because the above page specified

"5601(a)(1) – Possession of an unregistered still."

and you also cannot set it up in certain locations

"5601(a)(6) – Distilling on a prohibited premises. (Under 26 U.S.C. 5178(a)(1)(B), a distilled spirits plant may not be located in a residence or in sheds, yards, or enclosures connected to a residence.)"

Just be careful not to produce, remove, or trade your registered still without authorization.

§ 29.55 Registry of stills and distilling apparatus. (a) General. Every person having possession, custody, or control of any still or distilling apparatus set up shall, immediately on its being set up, register the still or distilling apparatus, except that a still or distilling apparatus not used or intended for use in the distillation, redistillation, or recovery of distilled spirits is not required to be registered. Registration may be accomplished by describing the still or distilling apparatus on the registration or permit application prescribed in this chapter for qualification under 26 U.S.C. chapter 51 or, if qualification is not required under 26 U.S.C. chapter 51, on a letter application, and filing the application with the appropriate TTB officer. Approval of the application by the appropriate TTB officer will constitute registration of the still or distilling apparatus.

(b) When still is set up. A still will be regarded as set up and subject to registry when it is in position over a furnace, or connected with a boiler so that heat may be applied, irrespective of whether a condenser is in position. This rule is intended merely as an illustration and should not be construed as covering all types of stills or condensers requiring registration.

(c) Change in location or ownership. Where any distilling apparatus registered under this section is to be removed to another location, sold or otherwise disposed of, the registrant shall, prior to the removal or disposition, file a letter notice with the appropriate TTB officer. The letter notice will show the intended method of disposition (sale, destruction, or otherwise), the name and complete address of the person to whom disposition will be made, and the purpose for which the apparatus will be used. After removal, sale, or other disposal, the person having possession, custody, or control of any distilling apparatus intended for use in distilling shall immediately register the still or distilling apparatus on its being set up or, if already set up, immediately on obtaining possession, custody, or control. The registrant shall also comply with the procedures prescribed in this chapter for amendment of the registration or permit application.

(Approved by the Office of Management and Budget under control number 1512–0341) (Sec. 201, Pub. L. 85–859, 72 Stat. 1355, as amended (26 U.S.C. 5179)) [T.D. ATF–207, 50 FR 23682, June 5, 1985; 50 FR 28572, July 15, 1985; 50 FR 30821, July 30, 1985, as amended by T.D. ATF–439, 66 FR 8770, Feb. 2, 2001]