Did the ATF Just Make Airsoft Smoke Grenades Illegal?

Did the ATF just make it illegal to sell/buy/possess airsoft smoke grenades (and flashbangs)? It looks like it. At this time, CO2 powered flashbangs still appear to be legal, but anything with pyrotechnics or that burns appears to become questionable.
 
Smoke grenades are often used in military simulation style airsoft (MILSIM) for gaming purposes to act as an obscurant. They are also used in gender reveal parties or for emergency signaling devices. These “cold burn” devices use a low-temperature (approx. 190°F) to burn chemicals that release colored smoke.
 
Standard Mk18 smoke grenades with a hotter and more dangerous pyrotechnic fuse have already had an iffy legal background and were never commonly available on the open retail market. Flashbang grenades in the airsoft realm are basically firecrackers in a cardboard tube that looks like a real distraction device, but with a much lower dB report that basically creates a loud bang instead of a disorienting pressure wave. Both airsoft smoke and flashbang devices are similar to smoke bombs and firecrackers except no lighter/match is require to ignite them.
 
The ATF quietly posted on its website under “Special Explosive Device Exemptions”: “In November 2023, ATF issued an open letter rescinding special explosive device exemptions for certain consumer-style grenades (e.g. flashbang grenades, smoke grenades).”
 
Digging around locates a letter dated November 2, 2023, that includes a table of previously popular exempted airsoft smoke grenades, including from the popular Enola Gaye brand. Basically, every airsoft smoke grenade has been put on the list. Technically, if you own one of these without a proper ATF license, you are now in violation of federal law. Or at least that’s how I read this.
 
The ATF cites non-specific incidents where certain explosive devices “(e.g., flashbang grenades, smoke grenades)” were used against law enforcement and claims that they have caused wildfires. “Based on these public safety concerns, ATF has determined that these explosive devices pose a risk to public safety and rescinded the SED exemptions.” In other words, because they’ve been used in uncited criminal acts and are dangerous, we can’t have them.
 
"As a result of these rescissions, these explosive devices are no longer exempt from the provisions of the Federal explosives regulations at 27 CFR Part 555. Accordingly, any person engaging in the business of importing, manufacturing, or distributing these devices must obtain the applicable Federal explosives license. In addition, any person acquiring the devices must first obtain a Federal explosives license or permit." [emphasis added]
 
The requirements to obtain a license/permit and store them within explosive regulation guidelines would make it effectively impossible for average citizens (airsofters) to own these devices. Those with these items in their possession may be unknowingly in violation of the law.
 
As of this writing (November 15, 2023), the author has been unable to find any statements from manufacturers or retailers. Some websites still show these popular products in stock and for sale, others out of stock. Be advised that purchasing these after-the-fact may result in the seller being forced to turn over purchaser information to the ATF. At this time, the author has no information regarding legal challenges or comments from ATF, manufacturers, or retailers.