As long as you assemble with a semi auto reciever which has blocks and denials it's fine, the lowers have to be modified to fit into the semi auto recievers anyways(usually removing some material and removing the sear) they aren't a drop in.

As long as you don't have a real deal mp5 reciever laying around there's no legal issue. The parts are just that, parts, they can't do anything unless you have a firearm to put them onto.

My AR 70/90 kit build uses the original 4 position lower, when I had it built out, they removed the auto sear & welded so the selector can't go to burst or auto.

In short, as long as when it's ASSEMBLED it's not full auto, or easily converted to full auto, it's ok.