Regarding cops, that is going to be a problem. Since you can't prosecute and arrest for federal crimes locally, many states have their own state statute outlawing machine guns and whatever. This gives the state and local cops the power to arrest someone for having an illegal machine gun, once you're in custody if ATF is interested they take over, if not your local prosecutor does. Usually they give an exception for machine guns that are properly registered federally. That's how Indiana is anyway.
So if you read the actual Indiana code on this it basically says all machine guns are illegal, then the next section says operating a machine gun is illegal, then we get to the third section which says this does not apply to and then it gives the usual military and police exemptions, manufacturer and dealer, and of course if it is owned and operated by someone who properly registered and transferred it with ATF.
This is what is known as an affirmative or positive defense. Just the fact you have something that goes brrrrrrrrrrrrpp in front of the officer, the court is going to say that is prima facie evidence you have an illegal machine gun. This now puts the burden of proof on you, you have to prove that it was registered with ATF to be legal.
But it's not a machine gun you say, see this little part makes it do this not that. And of course the court will say you can't expect police to be experts on the internal differences between a frt or super safety versus a real machine gun. Any reasonable person if they were not aware of the differences would think firing fast like that was a machine gun. A Texas judge says it isn't, and New York judge says it is.
There's going to be some interesting times ahead.