Does that preclude FFLs from processing transfers of home assembled ARs between a private buyer and seller?
No, it doesn't preclude them from processing the transfer. But that also doesnt eliminate the manufacturing issue. If a person starts assembling ARs for sale they would still be breaking the law even if they go through a licensed dealer for transfers. Even licensed gunsmiths are not allowed to do this. You must be a licensed manufacturer.
This ruling came about becase "manufacturing" was not defined by congress in creation of the law. So the courts use the ordinary meaning of “manufacturing”; that is, actions to “make a product suitable for use.” It is not restricted to just the manufacture of the receiver as some think. See, e.g., Broughman v. Carver, 624 F.3d 670, 675 (4th Cir. 2010).
What the ATF has to decide is whether the activity is for personal use or as "engaged in business". If the person “devotes time, attention, and labor to manufacturing firearms as a regular course of trade or business with the principal objective of livelihood and profit through the sale or distribution of the firearms manufactured" they are a manufacturer who is required to be licensed. So if a person tries to make money by assembling firearms without a license they are in for a lot of legal woes.