This implies that teams are allowed to switch out Subsystem 3 during a competition is legal. Building a mechanism for which you use only for certain matches, that you can quickly mount in between matches, is also competition legal.
Is this interpretation correct?
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I would suspect, that if this is competition legal, competition officials would need to inspect the robot in both states. Is this also correct?
Yes, this interpretation is correct. Teams may freely switch out between different Subsystem 3’s, as long as the Robot has been inspected in all of the various configurations.