Well, if you put it together with all the parts i see in the kit (pictured)... It will not work. It is missing the disconnecter. Now, if you assembles as is and put in an M-16 disconnecter, then YES, it would be a machine gun, however would not operate correctly as there is no hole for the automatic sear. If you drilled the hole for the sear, then Double YES, machine gun. Without the sear it would slam fire, and or fail to fire.
- To do it correctly and use this kit with original parts, and to be legal, You would need to file down the selector drum, in effect giving you 2 semi-auto positions, and use an AR-15 disconnecter, or file the tail off the M-16 dsconnecter. Also best to file the extra tail at the end of the hammer head (at back) of the hammer. The rest is usually fine. I myself have an old SGW (Now Olympic Arms) XM177E2 Commando modeled after the old Vietnam shorty M-16. I have the modified M-16 set in mine too, with two positions of Semi-Auto. It looks very cool. Now, some of those companies will not include the Auto-Sear to certain states, and in fact that part by itself is a contraband item in WA state. I do not have that part, mine was assembled when i purchased it over the counter. So i hope that helps to answer both the legal and technical sides of the question