bshatto,
I also was considering setting the Lopi into the fireplace opening some inches. ( Guess I was remembering the wood stove sticking out and the only possible consideration, not to do it, that the stove shop person gave is the location of the control panel - more on that below.)
The vast majority of the heat does come out of the front heat tubes. Little heat is generated to the sides and top ( unlike a wood stove).
There is no reason why the free standing Lopi cannot be set into the opening some inches, but there are a few other things to consider .
The control panel is on the left side of the stove. The back edge of the panel is 4 1/2 inches from the back edge of the stove. Once you get your settings the way you like them, you shouldn't need constant access, but I use the panel control switch to turn off the stove for daily cleaning.
The handle on the hopper lid, when fully open for loading, comes within about 8 1/2 inches from a vertical plane extending up from the back of the stove.
The third consideration would be the location of your damper and smoke shelf within the fireplace for placement of the cleanout tee and piping.
A professional installer should check your fireplace and chimney anyway and can advise on the mechanics of the flue connections.
The Lopi is a nice stove and should make you happy no matter what your final placement decision is.
By the way, the Lopi works extremely well with a remote wired ( or wireless) thermostat.
Good luck and let us know how you make out. ( We will of course want pictures
)
Ranger