I don't think it's fair to assume Rhineland Arms is trying to pass this off as a real world upgrade. Rhineland specializes in novelty firearms, and I think they are great at innovating such products for that niche.
Just like their HK94/MP5 inspired rimfires, I don't think this set up is being designed for combat use. JMO.
That said, I think it would be a very interesting plinker if it were chambered in a less expensive rimfire caliber, especially on a registered receiver.
ETA: I just went to their site, and the Walther WA2000 inspired USG mag fed rifle is pretty cool looking too. While I'm not a fan of the 5.7, I do find such products amusing.
2nd edit: Wow! They're also offering a WA2000 inspired rifle in 5.56 and 6.5 Grendel also.
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