I do have a copy of the paperwork, the only thing on the form 3 is the sear, and no reference to any host gun in box H or elsewhere, so that aspect seems pretty clear-cut to me. File the form 4 for the sear, and transfer the host gun to me on a 4473. Since the host is at that point completely mine to possess, I would be free to take it home.
I get what you're saying now about a dealer having the ability to delay a transfer process, I guess there are some real slimy and petty people in this business, that's very unfortunate. I don't think this particular dealer would do that, though.
I also get that you have had bad experiences with customers, but to be clear, I have not demanded anything of the dealer nor insisted that a business has to do anything for anyone, it was simply a conversation about what I can take with me and why (their 'why' was a vague claim that the ATF 'makes them do it this way'). I'm just trying to understand and resolve a situation where a dealer is claiming a title 1 firearm is not 'allowed' to be transferred to me on a 4473, a situation that seemed to me a very standard procedure in this industry.
Anyway, I called a few other shops in the area and all of them were willing to 4473 me the host gun while the sear waits on the form 4. I will speak with the dealer again and try to reach an understanding about the specifics, and if there is no resolution, I will simply have them form 3 it down the road and use one of the other dealers in town from now on. Sure $100 for one transfer doesn't matter much, but I do spend multiple thousands with this shop. I'm certain that losing my business won't have a significant impact to their bottom line, but it doesn't generally seem good business practice to drive customers away over simple and resolvable matters for no reason other than an imagined ATF requirement. I wonder how many others have stopped doing business with them for similar reasons. They did have a 2nd location close down in recent years.