It's not that simple.
In order for any registered firearm to be deactivated, the process requires the approval of the registering authority.
Failure to notify the registering authority of the deactivation and classification change is an offense.
If this DEWAT ever came to the attention of law enforcement, they would run the serial number against those in the registry.
If the serial number came up as a live gun registered to another individual, both parties would have a lot of explaining to do, and would probably face charges.
Many MG's came into Canada over the years. In order for them to be legal for sale, they either had to have been deactivated by the importer, or registered with the RCMP.
If the serial number for this DEWAT is not in the firearms registry as ever being a registered live FA gun, then it was never a firearm for purposes of sale or transfer in Canada. It should be a non issue.
As I stated before, if it did come up there would be an investigation.
The gun has to be approved as deactivated by the registering authority before it can be declared a "non gun" and removed from the registry.