in Texas the law is written in such a way that L.E. can in fact take you into custody and seize your NFA weapon, even if lawfully NFA registered and possessed.
it states in the Texas Penal Code that an L.E. officer can arrest you whether or not it is registered, but when you are arraigned if you show the judge your NFA registration form they must drop the charge.
it is written in such a way that an L.E. officer who is not well versed on NFA law can arrest you and then go back to the station to read up on the law, and it is not considered a false arrest.
also keep this in mind if you are stopped, legally with an NFA weapon and registration papers to prove it, not to tell the officer to go pound salt. he may know the law very well and can take you into custody regardless of the form in your hand and seize your weapon, at least temporarily. best policy is always to be "officer-friendly" when stopped and in possession of your NFA weapon.
be advised that alot of officers do not know whether it is legal or illegal, and sometimes their department policy further confuses them. for example, in certain counties the CLEO normally doesn't sign off on NFA items so people either incorporate or sometimes they find the right guy to sign. the bottom line is that if the officer knows their department won't sign off on it then it must be illegal in that part of the state and hence they believe it is against the law and arrest you.
i've spoken to many L.E. officers regarding NFA law and about 95+% of them have indicated they don't know what a NFA form looks like, what to look for, who to call to verify it, etc. this is due to lack of proper training. they wouldn't know the difference between a Form 1, 2, 3, 4, 5, or 10 for that matter, but then neither would most NFA owners either unless they are really versed in the in's and out's of NFA. i don't expect anyone to memorize something they can look up either.
given the fact that most have never had training on it (those who are versed on it are most likely gun enthusiasts or NFA owners) they simply wouldn't have any reliable information to go on. i have volunteered to do free presentations and training to agencies so if they encounter them at least they know what to look for, but haven't had any takers yet.
yes there are alot of misconceptions and myths about Class III weapons, not just machine guns.