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Technically, it is an unregistered machinegun, whether it is operable or not. When the law was changed in 1968 to require registration of even deactivated machineguns, the (then) ATTD stated that if the gun was made as a machinegun, even if it was totally inoperable, it was still a machinegun.
Since 1986, it has been impossible for a private entity to register a machinegun, so any attempt to register even an inoperable gun would result in confiscaton of the gun and possible prosecution of the owner.
Now, I don't see a BATFE agent arresting anyone or a U.S. attorney prosecuting over a rusty relic, but AFAIK it would legally be the same as an operable gun.
Just FYI, you can't "torch and demill" an unregistered gun; it is illegal and can't be made legal. You can (if you are really dumb) weld up a registered machinegun, but it would still be registered as "inoperable".
As to salvaged and unregistered automatic weapons being on display, that is interesting but irrelevant. If someone has ten kilos of heroin on his porch in full view of passersby and no one says anything, that does not make the stuff legal.
Jim
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