You are absolutely 100% right in all of your thought processes. To be embarrassingly honest, I made the original statement simply because I don't like making one sentence posts. It feels cheap to me. Thus, I used that statement as a filler, not thinking that anyone would tear it apart like you did.
![Big Grin :D :D](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)
It was not meant to be serious by any stretch of the imagination.
You are also correct in that the weapon would have to be modified to the point that it would no longer be recognizable in order to force it to chamber a 12.7mm round. Everything from the barrel to the receiver would have to be heavily modified. Also, as you point out, the SMGs internals are not designed to handle real ammunition, although the concept of caseless ammunition is an absurd one. The power of a bullet comes from the rapid expansion of gasses that are funneled by the metal casing into the barrel. A casing that burned with the gunpowder could never contain the gases like a metal one could. This would further slow down the bullet, which is already inherently slow, effectively lowering its killing power. Ignoring all of that, such a casing would cause the gun to get incredibly dirty, incredibly quick, which would ultimately lead to LOTS of jams and malfunctions.
I also just wanted to clarify that the term "Assault Weapon" is a political term and not a technical one. It basically describes any kind of rifle that has the features of military rifles. The term I should have used was machine gun.