It is not a taunt and should not be treated as such. To do it the player in question must press buttons on their keyboard (not afk frozen if that's the order) and the player's model moves in the view of other players as well.
Me saying that as a warden often brings up the argument that afk frozen reds still can do voice commands and write in chat, I keep trying to tell them that this is just an alternative to speaking and doesn't involve "real" pressing etc. as they are not game relevant such as movement, but then I get redirected to the rules section in wich as
@Overkill already said nothing really speaks against it.
Problem also is that in the time I was playing it spread between the Reds and resulted in many accidental freekills or in taunts being allowed during afk freeze as many could either not distinguish between them or just said that it isn't afk frozen.
If the case concludes in the Contractor being allowed during afk freeze I'd suggest it to add it to the rules like
AFK Freeze.
No moving, no usage of mouse, and no taunting. Healing with a medigun counts as being AFK frozen,
so does taking out the Contractor.
..or similar to atleast solve any current confusion about it being allowed or not.