A system component that fails open will, in the event of a loss of power or control, default to allowing all traffic to pass through. A fail-closed component will, in the same circumstances, block all traffic. This concept is useful in, say, valves for oil wells
As far as I can tell, Measure 114 is still "Fail-Closed" regardless of what the Sheriffs do.
The law requires a permit to buy a gun. At the point of sale, the dealer is required to request confirmation of valid permit for the buyer from the State Police. Only after that happens will state police run the Federally required background check. Since there won't be any permits in existence on December 8th, the OSP will say so and refuse the sale even before running the check. Since FFLs are required by federal law to abide by all state laws, any skirting of M114 that the sheriff won't enforce still requires violation of state and federal law. This of course opens the dealer up to getting nailed by the ATF for illegal sales, risking loss of license and jail time. The only sales that will be possible will be face-to-face sales in violation of state, but not federal law.
So the system has been created like a game of Connect4 where enough innocuous pieces have been dropped onto places that the careful observer sees where the opportunities have been created for winning moves. FFL systems required for new guns to get into circulation was a choke point. Requiring background checks creates a fail-closed system. The 3-day limit (Charleston loophole) was an effort to preserve fail-openness because we are talking about a civil right here. Allowing private sales was too. Those two fail open protections have failed in many places and are under attack in others. Registration is the effort to kill another, less legally protected, fail-open situation involving existing untraceable firearms. Once the system becomes fully fail-closed, the chokepoints can be tightened at will. That's what they're after.