Some states have a state "universal check" .. where the ffl calls a number and provides information to ID the buyer. The state then approves or disapproves the transfer.
No actual gun information is provided to the state. This information is kept by the ffl, not the state in most cases.
If the ffl goes out of business, they turn over their file copy of the ATF form (has gun information). ffls are required to hold the forms for 20 yrs .. they can save for longer.
Now I write like a chicken, so if they could determine what I wrote on the atf forms more power to them ... but I doubt that they could. So when I turned over the forms I waited and waited and waited ... no call from the aft to discuss the illegible writing .. so I'm good.
And I destroyed all other records relating to my gun business (receipts, POs, etc.) .. all went into a fire.
So if the ATF calls me about a gun I can honestly say "I have no records"...
I really don't know what the ATF does with the forms turned in other than hold them. I would guess that the ATF in investigating a specific gun would start at the manufacturer, then go to a distributor, and then to the specific ffl files they hold to find the record of the specific gun for further information.
But really, a national instant check cannot work IMO.