Tough call, but I would probably err on the side of treating it as covered. The Reg. C definition of "open end credit" refers to the Reg. Z definition. That's a big rabbit hole, but one of the key features is that the lender reasonably contemplates repeated transactions. In this set-up, even though it's a revolving line of credit during the draw period, I think most neutral observers would bet that the borrower will take draws to pay for the construction, make the minimum payments required during the draw period and let it roll to permanent without ever paying down and re-borrowing. Or to put it another way, if you did 100 of these loans, how many would you expect to actually use the revolving feature? 1 or 2 at most, I'd bet. Under those circumstances I think it's safer treating it as closed end credit.
I get the HELOC comparison but: a) HELOC draw periods are usually longer than this and thus are more conducive to paydowns and re-borrowing; and b) even though the borrower may have a specific purpose in mind for the HELOC, the lender usually doesn't - the lender is allowing the HELOC for any purpose or no purpose.
On the other hand, if the borrower and loan officer have discussed it and the borrower's intent is to use the LOC for construction and also other purposes and plans to pay down and re-use the credit during the draw period, that would be different. But I'm betting that's not the case.
Nobody's perfect, not even a perfect stranger.