this is from a higway patrol friend of mine. (also a long time rider)
Yes, to be legal it is required to be displayed horizontally and clearly visible (not hidden behind the rear tire, bent up, or mounted under seat facing down at the rear tire). There is also a lighting requirement that says the plate has to be visible from 50 feet at night.
If you don't meet these requirements, it doesn't mean that every police officer is going to stop you for it. Just know that it is possible.
2009 Vulcan 900 custom SE