I don't see this as a real change. You already need an FFL if you're "engaged in the business" of buying and selling guns. This removes "livelihood" from the equation. "principal objective" and "predominantly" seem to have very similar meanings to me; and any difference is subjective.
Yes, both tests are subjective, but the current bar of both "livelihood" AND "profit" is subjectively higher than just "profit". Eliminating the "livelihood" requirement means that potentially anyone selling even 1 gun for more than they bought it could (and dare I say would) be compelled to become an FFL. Not one a month, not one a year; one, period. That would effectively make private sales illegal, which anyone here on NES should know is a wet-dream item for the hoplophobics and governmental controllers.
One might argue it's unenforceable, which might be true in states that do not register sales, but MA does and I can see it being enforced pretty easily in MA. In other states it would open the door (wider) for targeted sting operations and selective, tone-setting enforcement. The ATF wouldn't need to prosecute everyone, just enough people to drive private sales down.
In MA it would be even worse. With the Harshbarger <spit> "consumer protection" laws and regulations this would greatly reduce the already limited availability of "off-list" handguns. For example, you think used Glocks are expensive now compared to the real world, imagine the prices if private sales were eliminated as a source.
This might seem like an overly harsh reading, but I submit that it could be applied in this way, and therefore will be applied in this way. As has been pointed out, this change is being proposed for a reason, and one can bet the reason is not good for us.