Yeah it is. If the wheel protrudes the arch it's illegal.
The wheel can protrude as long as the tread pattern doesnt, thats why stretched tyres are used on low offset alloys or negative chamber....I've run lots of low offset alloys with the rite tyre width ( on an 8.5J I'd use 215/40's just enough stretch ) you'll be fine....I did my apprenticeship @ michelin in tyre technology and did a hell of work on cross sectional bead and tyre stresses. A small amount of stretch is fine..