I think that is correct,
if I understand correctly...an 006 allows you to produce ammo for sale to others. it does not allow you to produce AP and Incendiary. You would need the additional 007 to make those but your sales are limited to LEO and Military only under ITAR.
If he has an 007 then he is in violation.
not certain...but you can produce either for your own consumption without violating Federal Law
FROM THE ATF
This is what the ATF says
https://www.atf.gov/firearms/qa/license-required-engage-business-selling-small-arms-ammunition
Is a license required to engage in the business of selling small arms ammunition?
No. A license is not required for a dealer in ammunition only. However a license is required to manufacture or import ammunition.
[18 U.S.C. 922 (a)(1)(B); 27 CFR 478.41]]
See at: https://www.atf.gov/resource-center/docs-0/download
specifically, the definition of “armor piercing ammunition” in 18 U.S.C. 921(a)(17)(B) provides:
(B)
The term “armor piercing ammunition” means
—
(i) a projectile or projectile core which may be used in a handgun and
which is constructed entirely (excluding the presence of traces of other
substances) from one or a combination of tungsten alloys, st
eel, iron, brass, bronze, beryllium copper or depleted uranium; or
(ii)
a full jacketed projectile larger than .22 caliber designed and intended
for use in a handgun and whose jacket has a weight of more than 25
percent of the total weight of the projectile.