All woodburning heaters which are sold in the United States must comply with the emission standards in the EPA Phase II Wood Stove Emissions Regulations (See the link below)
The "35-to-1" stove (sometimes referred to as an "EPA exempt" stove) can be sold because they don't meet the definition of a "woodburning heater". One common way to be exempted is to be a non-airtight fireplace, with an air-fuel ratio inside the firebox of at least 35 to 1. To maintain this ratio, the fireplace must allow a virtual free flow of air into the firebox, similar to an open hearth fireplace. This airflow carries up to 90% of the heat from the fire up the flue, which is why most exempted fireplaces fall into the "just for looks" category.
These units may be "exempt" from federal standards that apply to the manufacturer of wood heaters, but some state or local air quality regulatory agencies have adopted regulations which may prohibit the installation of fireplaces and/or exempt units.