As I understand it the manufacture and serial markings on the receiver must be unobstructed in order to comply with regulation. A redimag attaches by clamping around the magwell where the majority of manufacture, serial, and Form 1 holder markings are effectively obstructing them. Therefore, redimags are noncompliant with ATF regulation.

Is this true or am I paranoid?

You are not paranoid, you are incorrect. There is no such regulation.

http://www.atf.gov/publications/download/p/atf-p-5320-8/atf-p-5320-8-chapter-7.pdf

That is not the regulation, that is a book full of errors. Looks like you found a few. Throw that PDF away and never refer to it again. It is full of incorrect info.





ETA:



And the section you quoted is for Licensed Manufacturer's, not non-licensees doing a Form 1 and/or adding aftermarket accessories to their gun.
 

No.
It is only admissable if the Judge allows it, there is no Case Law anywhere of it being admitted and someone getting acquitted, and just because it is full of errors does not mean the errors are telling you to do something unlawful.
ETA:
Let see what the handbook says about itself:
PREFACE
This handbook is primarily for the use of persons in the business of importing, manufacturing, and dealing in firearms defined by the National Firearms Act (NFA) or persons intending to go into an NFA firearms business. It should also be helpful to collectors of NFA firearms and other persons having questions about the application of the NFA. This means do not use it as a source for NFA law.
This publication is not a law book. Rather, it is intended as a "user friendly” reference book enabling the user to quickly find answers to questions concerning the NFA. Nevertheless, it should also be useful to attorneys seeking basic information about the NFA and how the law has been interpreted by ATF. The book’s Table of Contents will be helpful to the user in locating needed information. This means do not use it as a substitute to the actual law, or CFR, in case one did not understand what the 1st paragraph said.
Although the principal focus of the handbook is the NFA, the book necessarily covers provisions of the Gun Control Act of 1968 and the Arms Export Control Act impacting NFA firearms businesses and collectors.
The book is the product of a joint effort between ATF and the National Firearms Act Trade and Collectors Association. ATF takes this opportunity to express its appreciation to the Association for its






assistance in writing and making this publication possible. This means it is not BATFE sourced document, and their legal department will not stand behind it  in any legal sense.
But hey, if anyone wants to follow the advice in this book and when you get arrested, admit this handbook as evidence, good luck to them. A typical Federal Trial is only about $250,000 in legal costs. Appeals more, Guilty Verdict, priceless. And don't be dettered by the fact the Federal ADA has a 98% success rate in prosecuting gun crimes. Someone has to be the 2%.
 

Then an NFA Item can never be in a holster either.

The Federal regulations for firearm identification can be found in the USC (United States Code) Title 18, section 923.



...and unless the Supreme Court says otherwise, this is the law.

The Redimag has a cut out anyway so ylou can view your S#, at least the MOD2 does.

As long as the redi-mag is not welded to the lower. your good. You can engrave HK's in the groove for the A3 stock, so when the stock is pushed in, the info is covered.