Abstract A number of low-mass millisecond pulsar (MSP) binaries in their rotation-powered state exhibit double-peaked X-ray orbital modulation centered at inferior pulsar conjunction. This state, which has been known to persist for years, has recently been interpreted as emission from a shock that enshrouds the pulsar. However, the pressure balance for such a configuration is a crucial unresolved issue. We consider two scenarios for pressure balance: a companion magnetosphere and stellar mass loss with gas dominance. It is found that the magnetospheric scenario requires several kilogauss poloidal fields for isobaric surfaces to enshroud the MSP, as well as for the magnetosphere to remain stable if there is significant mass loss. For the gas-dominated scenario, it is necessary that the companion wind loses angular momentum prolifically as an advection- or heating-dominated flow. Thermal bremsstrahlung cooling in the flow may be observable as a UV to soft X-ray component independent of orbital phase if the mass rate is high. We formulate the general requirements for shock stability against gravitational influences in the pulsar rotation-powered state for the gas-dominated scenario. We explore stabilizing mechanisms, principally irradiation feedback, which anticipates correlated shock emission and companion variability and predicts F γ /F X ≲ 14 for the ratio of pulsar magnetospheric γ-ray to total shock soft-to-hard X-ray fluxes. This stability criterion implies an unbroken extension of X-ray power-law emission to hundreds of keV for some systems. We explore observational discriminants between the gas-dominated and magnetospheric scenarios, motivating contemporaneous radio through γ-ray monitoring of these systems.