Yes. Model airplanes in general are "too small" for them to bother with, as long as we don't create problems for them. They said as much (see full text of AC 91-57). Where they expect problems they enforce the law, to wit the situation with commercial use of model aircraft for AP. I suppose they expect that such use entails flying over houses and people (photos that are sold to Realtors are obviously taken over houses, newsworthy events for marketable photo-journalism opportunities gather people), so they do chose to direct enforcement activity at that. Another example of 'too small" to bother with is the weight limit on model airplanes of 25 Kg as defined by ICAO. FAA is responsible for ensuring compliance with ICAO standards, which the US is signatory to, but though the standard have been around for years, it has not risen high enough on FAA's priority list to get codified in US law.
AMA also deems some deviations from the letter of their rules "too small" to make an issue of. The instruction for hire on a 'casual' basis is such a case, and variance from general non-commercial model use policy is specifically allowed.
You know it's funny that there is a Sheriff in LA that shared your insight on how the FAA deals with what someone might think a small RC MODEL is a UAV or not. Obviously this Sheriff was a tad shocked to find out that because he was a sheriff and providing a public service that he could fly his 2lb aircraft less then 400 ft agl remotely. Well he didn't know UAS policy either, but was bright enough to show the world his new toy on the news, not knowing an FAA representative maybe watching.
http://www.boingboing.net/2006/06/26...-la-sheri.html
So the FAA doesn't regulate small models? You've got to be kidding me. The UAS policy's are in place now and soon they will be part of the FAR, officially. The FAA has been doing quite a bit to set the standards for regulating RC aircraft,
which includes any commercial ops of RC aircraft.
I seriously think you need to hop into the UAV forums and have the light shined on yourself. Also flying commercially or compensation is flying outside of walls of AC 91-57, the FAA specifically states this policy. This is the point of the discussion.
Oh you and I both know the difference between what's on the books, getting caught and not getting caught. Last nite I went to the market, I did 70 in a 55. I didn't get caught, but I know what would happen and would accept what would happen if I did get caught.
One other thing, if you want to be an RCU mod, apply for the job. I hear there is a waiting list, even thought they get $0. They like to flex their muscles too every now and again.