Interesting term use here.
This is the way I understand it, correct me if I am wrong here and I will edit.
NICS has 3 possible responses: PROCEED, DELAY, DENIED
MSP has 3: NOT DISAPPROVED, DISAPPROVED, HOLD
The State of Maryland juxtapositioned itself as the POC between the FFL and NICS for regulated firearms.
For unregulated firearms, the FFL calls NICS directly and gets one of the three possible answers within minutes (been my experience every time). If a DELAY is received, NICS can respond within 3 days with either of the other two responses. Silence is interpreted as PROCEED and the FFL CAN release the firearm.
For regulated firearms, the FFL and the purchaser complete both the State (77R) and Federal (4473) forms. The FFL then sends the State form (77R) to the MSP for regulated firearms. Part of the MSP background check is the NICS check. There are 16 other checks in MD. Somewhere in the process the MSP does a NICS check and records the NTN on the State form. When the State form comes back it has the NICS check number recorded. The FFL then records the NTN on the Federal form.
The MSP has 7 days by law to "DISAPPROVE" or "HOLD" the purchase. Currently they have an infinite amount of time to issue the "NOT DISAPPROVED". The Maryland annotated code gives the FFL the ABILITY to release the regulated firearm after 7 days if a DISAPPROVE or HOLD has not been issued with the word MAY. That leaves it up to the discretion of the FFL. And the FFL can set terms as he/she chooses for that discretion.
Federal Law allows the FFL to release the firearm after 8 days (per Brady Law and POC FAQ) if they have no response. Again, the FFL has the ABILITY to release the firearm.
In the end, the FFL is not breaking any laws by releasing the regulated firearms after 8 days if they sent in the forms and have a record of doing so, and have heard nothing. They gave the MSP the time required to issue the DISAPPROVED or HOLD notice. It remains unclear whether the MSP records receipt on their end or logs incoming 77R's.
BUT... And this is. Huge BUT.... They CAN wait too. And aren't breaking any laws by waiting.
Good summary.
So, If I'm MSP, and did not want firearms released prior to being reviewed, I would be sending out "holds" on every app that has not been looked at within 7 days.