"Is this legal?"
My take on federal law: It's a question of intent.
1)Joe wants to try a new design he has thought up, and makes his own gun: legal
2)Fred is a hobby machinist and thinks making a gun would be a cool project: legal
(I've done a 1911 frame and AR upper and lower from scratch)
3)Bob wants a gun but thinks Keltec's are overpriced and decides to make his own: legal
(but he's in for a rude awakening
)
4)After making the above guns, Joe, Fred, or Bob decides to sell or give away their
homemade gun(s): legal
5)Mike has had an AR lower forging setting around for a retirement project. Then there
is a panic and AR lowers are selling for $2000. He thinks 'Woot, easy money!!' and
machines the forging into a lower and sells it: not legal.
The dividing line is whether, at the time you made the firearm, you were intending to be
in the business of making the firearm, or if you were making it for personal use and then decided to sell it later.
This is like the rules for buying and selling guns in general: if you are one of those guys who is always falling in love with some new gun, and selling an old one to make room in the safe for the new one, you can buy and sell as many as you like: you're buying and selling personal guns, not as a business.
OTOH, if you're at the pawn shop and see a rare three screw Blurfl Model 86 selling for $50 and you know it's worth $5000, so you buy it and post on facebook 'Just scored an underpriced Model 86 - can't stand those personally, but am immediately going to sell it on Gunbroker for big bucks!!', then you're on thin ice legally. I don't see ATF getting excited about a onesy-twosey thing like that, but ...
So back to the guy with the zip guns: if he just liked to make zip guns, then gets bored with them and decides to sell - no problem. If he figures out he can make them for $50 and sell for $100, and starts doing that because he wants the money - big problem.
As with any crime with an element of intent, how do you prove intent? That's going to be what lawyers call a fact specific question for the jury. You made the guns years ago and are selling because you're downsizing and moving to a smaller house - probably going to convince the jury it's OK. You're there at the gun show month after month with a table of identical, freshly made zip guns - the jury is going to think that's kind of an odd hobby.
State law might be different. IANAL, and you shouldn't take random legal advice from strangers on the internet, and especially not from me