Another way of looking at it is that while people conformed with the spirit and intent of the laws which were reasonably clear nobody got upset with the odd gray area.
Then a whole industry sprung up with the single intent of circumnavigating the spirit of the law by exploiting the "loopholes".
Like bump stocks and binary triggers, the reality is attempts to find loopholes in the existing NFA regulations invites more regulation. Government rarely relax restrictions.
1) Yes, at that time they were breaking a law.
2) Worked out in the end, I seem to remember slavery was abolished ?
3) A right is only effective when society allows you to exercise it, whatever rhetoric you want to employ, and they change over time, like it or not.
I assume the ATF letter was in response to a query, as it makes no mention of revocation of an existing approval ?
I suspect if you're manufacturing something under your own design, (even if it's a copy), you'd be responsible for approval ?
I'd like to see it pass.
The chances of these being taken off the NFA are fractionally better than the NFA being repealed. I wouldn't bet more than $10 on that ever happening, just political reality.