On all play testing sessions I found that the default zero for the M16A2 is set to 200m instead of the minimum 300m given on a standard A2 sight.

On troubleshooting I compared the in-game sight to an archived copy of FM 23-9 dated July 1989 (Link provided) Near the top of 3-22 (Page 50) it says the following:

When a rifle is zeroed, the sights are adjusted so that bullet strike is the same as point of aim at some given range. A battle sight zero (250 meters, M16A1; 300 meters, M16A2) is the sight setting that provides the highest hit probability for most combat targets with minimum adjustment to the aiming point.

Further in section 3 of the document it shows the sight as it's supposed to be configured, but doesn't directly reference that the 3/8 setting is the default in text, or that the only setting below that is for zeroing at 25m. However the 2003/06 FM-22-9 does describe that in sections 2-4, 5-2, and 5-14.

Partially related. There seems to be a version of the Army FM 3-22.9 from August 2008 that changed the FM to include a suplimental 200m zero procedure as an alternative to 300m zeroing specifically for units deploying to an urban area. (found in section 2-5). However the current version of the manual (TC 3-22.9 13May2016) does not reference that, and Gives the standard 25m/300m zero procedure while mentioning that soldiers have to confirm zero at 300m before qualification.