Speaking to reporters Friday, Colangelo said Fultz was currently limited to shooting in the free throw lane.
"It's within the paint, basically," Colangelo said. "Paint shots. Perimeter shots are where you kind of draw a line."
Fultz has been sidelined since October with a shoulder injury that has limited him to four games this season. He told TNT on Tuesday that the saga will make him a better player when he returns.
Colangelo joined coach Brett Brown in noting that there is no set date for Fultz to play again.
"There's always a chance that he's going to be out there soon, and there's a chance that he's not going to play this year," Colangelo said. "I can't answer that question because we don't know the answer."
Asked if Fultz has been medically cleared, Colangelo said that isn't necessarily tied to the guard being ready to return to the court.
"He's doing some things on the basketball court, in the limited basketball activity that he's taking place in, that he's participating in, and he's dazzling in many ways," Colangelo said. "But when he's ready to help his team and be ready, I can't give you a timeline."
According to ESPN Stats & Information, if Fultz didn't return this season, his four games would be the fifth fewest by a No. 1 overall draft pick in his rookie season. Four players -- Ben Simmons (2016-17), Blake Griffin (2009-10), Greg Oden (2007-08) and David Robinson (1987-88) -- did not play in their first season after being the No. 1 selection.