I look at it this way:
The cartridge was found with the machine. Either it was originally obtained with the machine or it was obtained as a replacement, but it almost certainly wasn't faked as obtaining the machine is as hard as obtaining the cart and no effort was made to hide it in a standard shell. It's almost certain that they didn't produce a significant quantity this way either, as the parts are expensive and it wouldn't pass muster with Nintendo.
To fulfill their obligations, it's possible that Singer raided their engineering/QA departments for spare parts when a replacement part was requested, but it's also more likely that they went into the warehouse prime with other replacement parts/warranty spares or were tossed in with refurbished units. It's possible that they packaged these with a select few retail units when they didn't need them anymore. It could also easily be early hardware for retail displays or test marketing, even if it's 100% final design/code (had to know it if was worth trying to sell).
The software was developed by Natsume as "Raku x Raku Mashin" for the Japanese Jaguar JN-100 sewing machine (exact same machine). Because Singer is not a game developer and they didn't even make this machine, it's very unlikely that they did the localization themselves. It's almost certain that all development and localization was also done through Natsume. I think it's kind of amusing that they proudly rebranded this thing to celebrate 150 years of their technological development when they didn't even make it, but that only makes the product more interesting.
Where was I? Oh, yes: Singer may not have had a direct hand in developing or localizing the software code itself, but they still needed pre-production copies for testing, quality assurance, product packaging, and producing marketing materials, which is why we see one in their instructional video. Whether any feedback from them led to revisions to the final version, I don't know, but it could result in their prototype copies having earlier code (interested in a ROM dump!). Singer was probably responsible for all warranty claims in the USA and I wouldn't doubt that they used their early sample carts to fill warranty claims or to complete and sell off extra machines that they were only holding as warranty spares (once they were certain that all sold through official channels were out of warranty).
As for what constitutes a "prototype:"
Final code has never precluded a proto from being a proto, especially because protos are often refined and tested repeatedly until they are complete and are sometimes subsequently submitted for review or other purposes. If it was created as part of the development process outside of the final manufacturing process, even if it's a final version for review or demonstration, it's a prototype. If the NES Earthbound game was eventually released with the exact code that was on the prototype, would the proto cease to be a proto?
Well over a decade ago (heck maybe closer to 15 years) I found my Xexyz prototype in the wild on a shelf of used NES games. It had a covered up "MicroDen Corporation" property sticker, cross screws, an NES-SKEPROM-01 proto board, a cheap photocopied label, and pretty much everything this has, yet no one hesitated to call it a prototype. All indications are that the code was final. At least two more exactly like it have been found and few hesitated to call them prototypes either:
http://nintendoage.com/forum/mess...
MrMark0673 himself even said "Very clearly a proto," and he is probably the most prolific prototype collector on these forums.
Only major differences between this example and that: no property sticker and makeshift label is color.
Because this is almost certainly official and it did not go through the usual manufacturing process, I have no problems calling it a prototype... even if they intentionally sold it to an end user. If I recall correctly, Atari has done that with 5200 consoles after cobbling together spares of every model to sell off when it reached EOL.
