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Called Tile Can be Racked (Article ID 12)
Abstract: Although, the preference is to put it directly on the rack’s flat part, it is not required, a player can put a called tile in their rack, whether to call for mah jongg or for exposure.
Question from a player: A player called for a discard and declared mah jongg. She put the discard in her rack amongst her other tiles and then made her full exposure for mah jongg. Is this acceptable?
Answer from the NMJL: “When exposing, it is preferable to place the called tile on top of your rack before taking the tiles in your rack to make the exposure”
Source: Mah Jongg Made Easy 2020 page 14, The Play
Other answers from the NMJL:
“A player may pick up the discard, put it amongst her other tiles in her hand and then put up all 14 tiles for mah jongg.”
“The best practice would be to put the called tile on your rack and then expose, but there is no rule saying it must be done in this order.”
Source for other answers: National Mah Jongg League Bulletin Q&A (2013, 2020) https://www.nationalmahjonggleague.org