I agree with that. Remember loose lips sink ships.
As a sailor, I joined after the FN-C1D's left the fleet, but have in my collection a copy of a manual describing in detail how they function, and what the 'navy specific' changes were.
I own 5 FN's:
-Canadian C1A1 (Ex-OPP)
-Indian 1A1
-Australian L1A1
-Australian L1A1
-British L1A1
The safety sear that's been discussed is a simple little piece of metal that prevents the hammer from being dropped (to re-engage with the trigger sear in a semi-auto) until the breech-block carrier is almost fully forward, which means that the breech block is locked in place against the locking shoulder and the rifle is safe to fire.
Understanding how that little piece of metal functions in other modes is besides the point, and what other parts interact with the rifle to make it work in other modes is also besides the point.
That said, the US BATF-E deemed that every FN-FAL variant in the US (with the exception of a small number of Belgian Imports way back in the 60's through Browning) was not allowed to have a safety sear cutout. There are less than 2000 FN-FAL's in the US that are deemed to be semi-autos that have a legal slot for a safety sear. If you look at the newly manufactured FN variants in the US, they are all built without the ability to even install a safety sear.
There are home-builders of the FN in the US as well who have built their own semi-auto receivers, and they do not have a slot for the safety sear either.
In answer to the original question, why is the FAL prohibited? The variety of answers that can be found in this thread are many....and are probably all a factor:
-Oka use
-"easily converted"
-Looks naughty
-Government hates us
-Alan Rock pointed at a picture and said no
-It was about to flood the civilian market, and the government was mad at an importer
-etc etc etc
Why? Because the rifle was named, and listed, in Order in Council 13. Period.
NS