The original short 16's (XM177,et al)were an attempt to get the smallest possible package that would take standard mags/ammo to replace the huge variety of subguns that were being used. The short barrel was used in conjuction with a flash suppressor/sound moderator that was approx 4.5" long. Those original units are classed as a sound suppressor.
This thing with 10.5" barrel and 5.5" flash suppressor that we see now is just cosmetics, like pinned "collapsible" stocks.
Thats just the basics. I think it is covered in detail in some of better AR books