I think this is the best approach.
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Do nothing.
My agency has some of the 1033 M-16's and am the person that deals with all of our 1033 equipment. Some of them are converted to semi only and we did it by changing the selector and removing the sear. The thing with 1033 guns is they are never transferred to the agency permanently and while they are allowed to be modified they have to hang on to any parts they remove such as the sear and selector. I throw all of ours in a baggie and put them in the weapons safe.