According to the NFA, a rifle is.....
(c)Rifle
The term “rifle” means a weapon designed or redesigned, made or remade, and intended to be fired from the shoulder and designed or redesigned and made or remade to use the energy of the explosive in a fixed cartridge to fire only a single projectile through a rifled borefor each single pull of the trigger, and shall include any such weapon which may be readily restored to fire a fixed cartridge.

We also know that a rifle has to have a 16" barrel.

But.....what if a rifle was designed, made, and intended to be fired from the shoulder, and designed and made to fire MORE than one projectile through that rifled bore for each pull of the trigger? (stuff like duplex ammo and rat shot) Well, then it's no longer a rifle! It's also not a shotgun, since it has a rifled bore, and it's not a handgun, since it's designed to be fired from the shoulder. This means it's just a "firearm", legally speaking, and thus there are now now barrel length restrictions.

The key here is that this firearm was "designed and intended" for this. Franklin Armory spent over a year and a million dollars arguing this in court. It's not a "loophole", they're following the letter of the law. But, the firearm was designated as capable of firing multiple projectiles with one trigger pull from the start. (emphasis on multiple projectiles, not multiple rounds). So, you can't just declare your current AR to be capable of doing so now, at least not yet. That would have to be argued in court. But, there's nothing special about the gun. It's just a normal 12" barreled AR "firearm" with a 12.5" barrel, and a stock chambered in 5.56. It's just not subject to NFA SBR rules because Franklin Armory declared to to be capable of firing multiple projectiles,

These guys are geniuses and heroes. This will hopefully be a big step towards dismantling the NFA.

Frsanklin Armory Antithesis

in wondering how does it not fall in aow category. But not enough to look into it. Just goes to show how goofy our laws are.