After some more Googling, the closest I've seen is the Yugo AKM M60 rifle grenade.
Not sure if Yugo AKMs were used in 'Nam?
Here is the Yugoslavian AKM variation of the Avtomat Kalashnikov-47 with a spigot launcher for rifle grenades.
The integral grenade sight flips up and blocks the gas port to the cycling mechanism so that all gas is diverted into the barrel for launching. With the sight down it will cycle as a regular AK.
Also show are Yugoslavian M60 HEAT and M60P1 HE grenade types.
I'm inclined to agree that it's some kind of rifle grenade launching muzzle device.
Yugoslavia didn't really get cranking with the AK until the M70 in... 1970. Yugoslavia also focused on the Non-Aligned Nations movement. But they did export material to communist rebels, for example to rebels in Rhodesia.
What the gun also could be is a Polish kbkg wz. 1960.