Not quite, it meant "properly functioning". Even today, or at least a decade or three ago, clocks that kept good time were said to be "regulated". Shotguns and rifles that shoot where they are pointed are still said to be regulated as well.
That would now be extended to all adults of either sex not convicted of a felony.
Why limit it to those not convicted of a felony? Lots of things that were misdemeanors in the 18th century are felonies now. Plus lots of misdemeanors are in theory punishable by more than 1 year in prison or jail, but such sentences are rarely given. Nonetheless, those misdemeanors are felonies for purposes of denying one's RKBA. In days of yore, even real felons had their rights restored, once they had "paid their debt to society". Today I would do that after they had successfully served all their probationary time as well as their time actually incarcerated. After all, if you can't trust someone with a gun, why are you letting them out on the street. Those inclined to commit crimes with firearms will not be bothered by laws denying them the legal ability to obtain them.
Your points are well taken.