You can run side pipes with cats and O2 sensors. I've built several sets so far and they work fine.
They have to be a bit fatter to fit the cats inside. I make the body from 4.5" tube and the cat is 4" OD + a bit for the welds on the ends of the cat body.
The O2 sensor is in the collector just before the cat and is nearly invisible from outside the car. You have to crawl underneath to see them.
Food for thought.
Cheers