The adjust thing is an issue because the continued tube is probably heavier being steel and larger in diameter. Strength shouldn't be an issue for that reason, but if you had to have a small adjustible post near the top it is going to add a number of parts and undermine the weight budget. The strength of the tube increases by the square of it's diameter, all else equal (which it won't be, but very nearly is), and stiffness increase by the cube of the diameter. So if you have a 28 mm steel tube vs a 27mm alloy tube, it will work fine.

One bike that has some features like this is the Bike Friday. It is part of the folding issue, but there is a long upper mast section.