The one word that breaks it
Updated
The representation condition is broken by ordinary, well-meant, entirely truthful marketing language.
Moisturizing
FDA's own guidance uses it as the example: if cosmetic claims such as moisturizing, deodorizing or skin softening are made on a label, the product is a cosmetic.
Which is a problem, because moisturizing is what almost every handmade soap maker wants to say, and for a superfatted bar it is arguably true.
Being true is not the issue. A cosmetic claim is a claim to beautify or alter the appearance, and making one means the product is no longer represented only as soap.
The other cosmetic words
Deodorizing. Softening. Nourishing. Anti-aging. Brightening. Smoothing. Exfoliating, when offered as a skin benefit rather than as a description of oatmeal in the bar.
"Gentle on skin", "leaves skin soft", "for dry skin", all of them describe an effect on the person rather than a property of the soap.
The line is between describing the product and describing what it does to the body.
Where the claim lives
Not only the label, because the condition says labeled, sold and represented.
The product page, the listing title, the category it is filed under, the market sign, the sample card, the reposted review and the answer you give when somebody asks what it is good for.
A compliant wrapper on a bar listed under "moisturizing soaps" has not met the condition.
Why nobody notices
Because nothing happens. There is no gate, no registration to be refused and no inspection.
The consequence arrives as a wholesale buyer's compliance query, a marketplace listing takedown, or an enforcement letter, and by then the labels are printed and the range is built.
Which is why this is worth deciding deliberately at the start rather than discovering in year three.