The FAA did have a problem with the fake chain guns. They weren't really retractable -- they were manually attached or removed when called for. IIRC, the production company had to notify the FAA each time they were going to fly the bird with the "chain guns" attached.
One of JMV's first roles was playing a hippie who was drafted into the Marines. It was, IIRC, a made-for-television movie titled Tribes, and it starred Darin McGavin (Mike Hammer).
I recall the Airwolf helicopter had to be FAA approved for flight, but not for each flight.
Both the guns and missile launcher were propane powered effects. Many times the gun/ missile effects were optical effects.
BTW, the term "Chaingun" is trademarked by then Hughes Aircraft. Universal Studios used the term in the first season without permission , not realizing it was trademarked, and Hughes sent them a "cease and desist" order. Universal simply stopped using the term.
The cannon on the AH-64 Apache is a Chaingun. It is an electrically controlled cannon where the breech is opened and closed by a loop chain with a cam that operates the mechanism, allowing the gunner to control the rate of fire with a rheostat.
Obviously they do not retract ---- telescoping cannon or machinegun barrels don't work very well.