IANAL but I can't see how it would be any different in the case of an FFL holding an NFA item in escrow pending BATFE approval of the transfer to the eventual purchaser.
You would think there shouldn't be any difference, but according to my friend (and the FFL he used) there is. A regular firearm would have been processed in the manner you expect (the dealer holds it, but doesn't actually own it), but in the case of the SBR (and I assume any other NFA item, this isn't how it works, at least in WA.
Because the owner of the SBR wasn't an FFL licensed dealer, but a private citizen, the FFL would have to fill out the paperwork, pay the tax, and become the actual owner (and possessor) of the SBR, before they could sell it to someone else. And the time wait was approximately 10.5 months. SO, for the dealer to sell my friend's gun, they would have to buy it, (waiting the 10+ months for their paperwork to go through, the same as a private citizen) and THEN the buyer would submit their paperwork and wait ANOTHER 10+ months for it to be approved, THEN they could buy, pay for, and pick up the SBR.
According to the FFL shop used, if it had been a dealer to dealer transfer, the process would be the same as a consignment sale of a regular firearm, BUT, because it was an NFA item AND not a dealer to dealer transfer, then the total transfer process (paperwork, tax stamp and wait) applied.
(the shop FFL can't "sell" an NFA item it doesn't "own", except as a dealer to dealer transfer.) So in this case, no only would the FFL have to possess the item in the legal sense, it would also have to own the NFA item in the legal sense in order to sell it.
The way it was handled was that the shop assisted the buyer with his paperwork, my friend retained his gun himself, no sale occurred until the buyer's approval & tax stamp came through. Then my friend delivered the gun to the buyer, and got paid. Application was submitted middle of Feb, approval received shortly after Christmas the same year. (last year)
SO, it appears one set of rules applies to regular firearms, and a different set for non-dealer to dealer NFA sales.