I would imagine that lower receiver was pulled off of the production line due to the large “anomaly” on its left side, at the top of the channel for the magazine over travel stop. It looks like some sort of machining mishap resulted in a deep gouge in the receiver, which was then roughly hand-filed down and touched-up.
Colt was a bit more picky about the appearance of their AR15 rifles in the early days, as is evident from their grinding off forging flash on receivers and front sight bases. Maybe Colt pulled this lower off of the line because it didn’t meet their early “higher standards” for appearance, or they thought that a rifle with this blemish would be rejected by the military.
Obviously, the lower receiver is a fully functional part, so there would be no reason to scrap it. It might be for these reasons that the Colt executive was able to have this lower receiver built up into his personal rifle, using the parts that were on hand at the time.
Anyway, just speculating out loud as someone with factory/manufacturing experience. At any rate, it is a very cool and unique rifle!