Just based on design, I have a feeling it's something like a prop propane gun.
The design of the hammer would require removing a substantial chunk of material from the lower between the hammer and magazine well, as well as removing the bolt catch (or at the very least grinding off it's trip leg rendering it inoperable). It also has a new contact anvil added at an almost 90º to the original contact surface. To me, this indicates that there was a valve in the mag well area that fed the action of the cycling instead of ammunition of some type.
Hopefully someone will come along who knows for sure, but If I had to take a guess, I'd imagine it was a prop gun that had a propane tube fed down the bore to the muzzle and the sleeve kept it aligned - probably why the front of the upper was ground because there wasn't enough clearance for everything to fit and they need the extra space. The magazine contained a small tank or the mag well area had a connection with a small hose to an off gun tank. I'm going to go on a limb and guess that the bolt is spring loaded but depresses very easily - the gun 'fires' and back pressure compresses the bolt to the rear of the upper, the small tail remanent of the hammer is caught, pulling it back as well, which closes the valve and cocks the weapon. With pressure removed, spring tension returns the bolt and the process can begin again. Looks externally like the real thing, because it is, but instead of shooting lead it's throwing small fireballs.
That's my guess, but I'm no expert.