No, U.S. Government property transferred from one U.S. Army unit to another U.S. Army unit would not be "confiscated". That term means government seizure of private property for one reason or another.
The DCM did continue to sell rifles to NRA members right up to Pearl Harbor, but the numbers were small. The NRA only had some 25,000 members in those days, and not all wanted rifles. In addition, there were still some Krag rifles in storage, and those were also being sold (at $2.50 each) through DCM.
The U.S. did ship approximately 1,100,000 Model 1917 rifles to Britain in July-October of 1940; they were "purchased" by granting U.S. use of British bases in Bermuda, Jamaica, etc. They were not shipped as "Lend-Lease" since the Lend-Lease Act was not passed until March of 1941. More thousands of M1917 rifles went to Canada; the 80,000 figure sounds about right. Since those rifles were all in .30-'06, and ammunition was scarce, they were rarely fired and the British issued them to the Home Guard where they were used for drill purposes. Many of those M1917s that returned are marked "DP" not because there is anything wrong with them but because of the caliber.
Those shipments so depleted the U.S. war reserves that Army Ordnance went into panic mode and hastened to contract with Remington to use the old Rock Island Arsenal machinery and tooling (which had been given to Remington to produce rifles for the British) to make M1903 rifles for the U.S. Army. That led to production of M1903 and M1903A3 and A4 rifles by Remington and M1903A3 rifles by Smith-Corona, a typewriter company. There was a lot of concern about having S-C build rifles because the need for typewriters was actually more critical than the need for rifles. Fortunately, S-C was able to make both.
By mid-1941, the bugs had been worked out of M1 (Garand) rifle production and the new rifles were coming off the line in ever increasing numbers, so M1903 and M1903A3 rifles were relegated to use by support troops (transportation, engineer, etc.), with front line infantry getting the semi-automatic rifle. By late 1943, there were enough M1's to fill the need, and late production M1903A3's went from factory to depot storage; they were never issued and later given to allies or sold through DCM. When those rifles turn up today, some collectors don't believe they are really brand new and are sure they are rebuilt. But in fact they really are new, unissued and sometimes unfired outside the factory.
Jim