I keep seeing references to the ATF FAQ about BP, what people have been told, and other explanations, but I've never seen any clear cut explanation of what the law is from a source qualified to explain it.
If you read the "law" or the ATF FAQ, it still references the phrase "black powder is intended to be used solely for sporting, recreational, or cultural purposes in antique firearms".
This has NEVER been explained or defined by any authority that I've ever seen, not the BATFE or anyone else.
Just because the ATF says it's a regulation, does not mean it is federal law. They are creating regulations to enforce the law and at times they make mistakes with their regulations. see APCP law suit. If they have a regulation on the books and try to enforce that regulation, it can be challenged in court and the judge (who is constitutionally empowered to interpret laws) says the regulation does not enforce the law correctly, then the regulation is eliminated/repealed/retracted or what ever you want to call being thrown out.
I've read posts here where people quoted ATF agents that said the use of BP falls under the recreational use of BP and is exempt. I've read other posts where people quoted ATF agents that said the only exempt use is in antique firearms. I believe both posters because I don't believe the ATF has ever bothered to define their interpretation of that phrase of the law. I don't thing they will ever define it until they get in front of a federal judge that insists on hearing what their interpretation is.
The bottom line as I see it, until someone goes to court and has a judge interpret that line in the law, there is not going to be a clear and definitive definition for the use of BP in rocketry. Until that happens, the next 1000+ threads on here is not going to solve anything or post any definitive explanation.
Some of you will interpret it very conservatively and as tightly as possible, other will see it as loosely as possible. Neither group will be able to say they are right until a judge hands down a ruling.