Tried out in Combat ops Arland.

1. Spawn to the map and go to arsenal and open arsenal
2. add magazines for your m16 with right click until everything full (will result 17 mag total)
3. back away from arsenal
4. reload

Inventory and on screen magazine count shows 16 magazines and the one magazine is at your feet

The issue really is that if your vest can hold for example 10 full magazines, reloading causes you to lose the magazine from your weapon. But you still can pick up that magazine afterwards. I figure the game only accepts one reloading mechanic in which the order goes

1. remove magazine from weapon and put it in inventory
2. take a full magazine or the magazine with most bullets from inventory and put it in weapon.

If there is no room in inventory to start with old magazine gets discarded.

In reality when you are doing a reload while used magazine is not empty and switch to a fresh magazine (combat reload), the order goes

1. take magazine from inventory to your hand and move it next to your weapon
2. release the previous magazine from weapon to your hand or let it drop and swap the new one in
3. put previous magazine in inventory

This way the weapon is without a magazine the shortest time