As I suspected, the FAA is leaning toward stated purpose and not on-board equipment/capabilities in their segregation of UAs and model airplanes:
In the eyes of the FAA—or at least within the current thinking of the FAA—a model airplane ceases to be a model airplane when it is used for any commercial purpose, regardless of its size. What it becomes and what regulations it is subject to is still up in the air. Although the FAA is discussing this topic, it seems to be adamant that the aircraft are no longer model airplanes, and should not be operated under the guise of the unregulated—or perhaps more appropriately, self-regulated—sport of model aviation.
Unmanned aircraft or UAs are the latest moniker for these non-model airplanes, replacing the earlier RPV and UAV. At the root of the difficulty is the basic philosophy of the FAA, which separates model airplanes flown for sport and recreation from UAs. It is one of its uses rather than one of its descriptions. Within the aeromodeling community, we tend to differentiate between UA and model airplanes on the basis of equipment and technology, and this difference in philosophy creates a few misunderstandings.