The guy who filmed himself cutting the barrel of the AR-15 committed a felony, since he created a Title II weapon with a >16 inch barrel...
correct, although he is unlikely to face any charges as the BATFE has bigger fish to fry.
...without a class 2 (manufacturer)...
you need type 07 or type 10 Federal Firearms License (a business license, not for individuals generally other than the type 03) in order to manufacture Title II items. i possess a Type 07 FFL, allowing me to manufacture most Title I and Title II items, but not AP ammunition or destructive devices.
...or class 3 (SBR owner) license.
not true. there is no special license to own any Title II weapon unless your particular state has something (in California it's a Dangerous Weapon Permit). the SOT (Special Occupation Tax) classes are tax filing statuses that you append to your Schedule (C usually, but if nothing else it's on Schedule M. if you're in individual like a pawn broker it might be on a 1099 instead of a 1040). typically this is form ATF Form 5630, where the BATFE collects the annual tax for the IRS.
SOT Class 1 is an importer, SOT Class 2 is a manufacturer (i have this SOT, and also pay an annual tax to the TTB, the Tax and Trade Bureau), and SOT Class 3 is for dealers. they specify different rates for taxation based on the precise nature of your business.
there were other SOT types for tobacco, alcohol, certain Schedule 1 drugs, et c, but i think those were repealed in the 80's.
too many people somehow think you need a special permit to own a Title II from the feds or that a "Class 3 license" exists. neither is true.
