Would an upholstered gokart seat be SM legal as a passenger side front seat? I've seen these seats with a seating surface covering resembling low pile carpet. I recall there being protests in SP in the old days for the bare shell type kart seats.

Would just be used for bigger events to save max weight & much cheaper than a real CF race bucket I'm guessing.

Yes, it is legal as long as it is securely mounted and covered.