Maybe its really freakin' broken?!
We are quick to jump to assume it has been illegaly modified, and probably it will turn out to be the case, but it just might be simply broken. It isn't the expected result of a "broken" safety, but I have seen some strange things happen over the years.
We don't know exactly what is broken, or how, so at this point, who can say for sure? I have seen an M16A1 fire full auto with the selector in the semi position, and NO broken parts! It was misassembled, but not broken!
All the FFL knew was that the safety lever moved further that it ought to. He apparently assumed it was broken, and passed this info along to the buyer. IS it the dealer's responsibility to know and understand the inner workings and misworking of every gun he sells? Yes, its nice for us when they do, but is it their responsibility? I don't think so.
There may be a law covering sale of an item that is known to be unsafe (like a car with brakes that don't work), but how, and if this applies to the pawn broker, I don't know.
I have seen an FAL whose lever would go all the way to what would be the full auto position. There was no full auto marking on the reciever. The gun would not fire full auto. IT did not have full auto parts. Only the safety lever moved more than expected. Completely legal rifle, just had an odd quirk.
A full function check of the AR in question might have revealed the capability to go full auto without shooting it, but a lot of people, FFLs included, don't know or understand how to do that.