It's an AR-15 variant just like the HK-416 it's based on. Yes, it has a piston, but technically the DI system has a piston too -- it's just configured differently.

The M27 / HK 417 is an AR15 with a gas piston retrofit. There is an advantage to piston operating systems for really short barrels, where DI systems do not excel.

In fact, many such piston AR retrofits exist in the US civilian AR market, but they’re generally thought to be of “unproven” longevity, at least.

The advantages of the retrofit piston being slim and light is that the recoil increase is small. The disadvantage is that durability is questionable, as those pistons experience a lot of violent force and most guns designed from scratch to be piston operated have significantly heavier duty pistons, for good reason.

You can read online of Marine armorers lamenting how their M27s are breaking down at a rate much faster than their M4s. This is of course anecdotal, but it is also not entirely worthless data.

The M27 upper is 100% compatible with a standard AR15 lower. The main advantage to the short stroke piston is that the gas tapped off the barrel that operates the system has less distance to travel before it hits the piston compared with the standard system, and so it works more reliably with short barrels than direct impingement.

The "direct impingement" system of the M16 / AR15 isn't really true direct impingement, as the bolt itself works as a gas piston within the bolt carrier. But the gas has to travel much further to reach it than with a conventional piston.

The reason it's more reliable, in my experience, is that direct impingement system introduces a shit load of fouling into your chamber and all the moving parts. After about 1k rounds, that bolt starts to move slowly from all the fouling, then you'll start to experience inconsistent feeding / ejecting. It's a shitty system and it's about time they've done something about it. The traditional fix is to dump a load of CLP into the rifle...which attracts sand and dust.