It IS a cool project.
While we're arguing statutes, it pays to point out two things: this is not a "firearm", nor an "antique firearm, nor modern replica therof....it is a "cane gun" which is clearly defined as an "any other weapon", muzzleloading or not. Muzzleloading machine guns would not be legal to make under any circumstances, and putting a silencer on a muzzleloader, regardless of how impractical, would also require proper paperwork and tax stamp paid just like a detachable air rifle silencer does. The other thing is whether or not you think you understand the regulations well enough that you are willing to risk having to argue your interpretation in Federal court with a $15K lawyer on retainer and your next 10 to 20 in the balance.
If I remember correctly from years ago the tax to make or transfer an AOW is $10 but the paperwork and wait time for an ATF form 1 is a pain in the neck, not to mention the stewardship of a Title II weapon.