Recoil dampening already exists. The AA12 from a few years back being the prime example. However from the practical perspective… that’s just the tip of the iceberg of issues.
Capacity, a decent shotgun shell is wider and larger than an automatic rifle cartridge. This limits the size of your magazine capacity volumetrically. An 8 round magazine is about the maximum practical volume for most magazine pouches on par with a standard 20-25 round battle rifle magazine. Which would be more useful? 25 rounds of 6.8x42mm or 8 rounds of 12 gauge? To get more you need a drum 32 round drums get very big for the same space and weight you could pack 75 rounds of 7.62x51mm or 100 rounds of 5.56 NATO. Yeah a 12 gauge will do a lot of damage up close but a so would a good couple of intermediate caliber shots.
Weight. 11lbs to 16 lbs loaded was the AA12 other systems similar issue. To get selective fire you are pushing the receiver of the weapon bigger than a battle rifle. A Saiga 12 has a double wide receiver because the diameter of the 12 gauge is double that of a 7.62x39mm round. That however is a semi
Pressure and loading. The Chinese have a bit of an advantage here as they are probably using a refined version of the QBS09 shell. So closed loop from shell development to shotgun. But automatic and semi automatic shotguns have a hard time due to one of the variables of 12 gauge production. It’s inconsistent. Almost every producer has their own spec on how they make shells. This is why you often see sizes listed in inches. And the pressure loading between manufacturers and types can vary significantly. Which for gas operated automatic actions even manual ones can be a real pain. Either too much gas or too little and the gun won’t cycle properly. It either blows up, blows through ammo uncontrollably, or doesn’t work. The AA12 used a proprietary shell loading designed by its manufacturer to compensate for this.
Range. Shotguns can be fired at range using slugs but that’s a specialty round to compensate for taking the shotgun out of its primary role. Fine for hunting but unnecessary and frankly inefficient to combat. Shotgun’s primarily are for CQB in combat roles or occasionally these days skeet shooting drones. The main purpose being that it’s a secondary weapon. Breaching, Close quarters, swatting flimsy drones. Those don’t need the fully automatic 12 gauge shotgun. They are just a little much.
Then you factor in that this is supposed to be a military weapon… the proliferation of modern armor… even old steel or early soft armor means that in CQB most of the function of a 12 gauge shotgun is gone. In police roles fine some value. But in infantry on infantry. Particularly near peer. You have soft armor being integrated into combat uniforms and soft and hard plates the results of asymmetrical combat being that the chances of getting a disabling hit with a combat pellet even over the torso is slim. Even in automatic. The modern military roles then drop to breaching where you don’t need automatic and shooting drones where you can actually get the same effect with a few well placed rifle shots.