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If I would want to build a sporter out of a M/N, and just went to a LGS and bought one without using my C&R, I still have to enter it in my bound book. Now, it's a C&R in my book, so I can't sporterize it. If any C&R in my possession has to be in my book, I cant "disposition" it to me, without putting it back in my book! Sounds like a vicious circle.
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I am under the impression that, if the C&R weapon is "sporterized" and no longer qualifies as a C&R, that it simply cannot be re-sold as C&R, and must be sold (transferred) through an 01 FFL like any other non-C&R weapon.