The problems with this action are manifold. First, the M1 and M14 actions were designed to be manufactured to fairly tight tolerances. When a re-weld is assembled, there are six degrees of freedom that have to be matched perfectly between the two halves. Second, the original receivers were heat treated and case hardened, the latter operation making re-welding a technically difficult action resulting in cracks if done wrong (and generally even if done right! --ed.). Finally, assuming the welder overcame the preceding two hurdles, he'd have to re-heat treat the receiver, and re-case harden it, non-trivial operations not likely to be done well by your average shade-tree welder.
Update from Jim Keenan:
Have just been looking at the Fulton webpage. Thank goodness someone agrees with me on the M1 rewelds! I have tried to tell dozens of "proud" owners that they have junk - the result usually is the same as calling the guy's wife names.
In two cases, the owners insisted on having receivers magnafluxed to prove me wrong; in both cases, I was right - they were rewelds.
There is one more point on the rewelds other than the ones you mention. If the receiver is shortened in the cut/weld process, the firing pin may be able to reach the primer before the bolt is locked, that is when it is not yet in the safety cutout in the receiver. The result could be nasty.