"There is no switch whatsoever, let alone a 'full auto' setting..."
Are you at all familiar with the MP-5 family of firearms?
There most certainly is a "switch," which is a coloquial term for lever.
In a semi-automatic version of the MP-5 the "switch" moves through two positions -- Safe and Fire.
In the fully automatic version of the MP-5, the "switch" moves through three (or in some versions, I THINK four) positions -- Safe, Semi-automatic, Burst, and Fully Automatic.
Without physically examining the firearm, there's simply no way for the officer to ascertain if the gun is in fact a semi-automatic or fully automatic.
From that standpoint alone his actions were fully justified based on the stated requirements of Oregon law regarding semi-automatic vs. fully automatic firearms.
"The gift which I am sending you is called a dog, and is in fact the most precious and valuable possession of mankind" -Theodorus Gaza
Baby Jesus cries when the fat redneck doesn't have military-grade firepower.