Yes I think you are right. The BATFE does not write law anyway. Congress does. They just issue regulations and this is a twisted contortion of the law. I don’t think it will stand the legal test.
The law is about actual AP rounds for handguns, but for rifles that’s not the case. ATF does a lot of head faking for public consumption and under Obama/Holder favor leftist groups. They have gotten the ammo manufacturers and distributors not to provide AP rifle cartridges for general public use as we don’t see them being sold at your local Walmart and other box stores. However, AP cartridges are out there for public use if you can find them. As this Youtube ammo tester shoots 7.62 Armor Piercing Incendiary API rounds as seen here.
https://www.youtube.com/watch?v=mYgtv96EWB8
or
Or even HEI
https://www.youtube.com/watch?v=6SG0XoAWY70