I will hazard the following opinion. Street Fighting as defined in A11.8 is an option initiated by a unit advancing into the qualifying AFV's Location. D7.211 demands that both units meet all requirements for CC Reaction Fire and Street Fighting, which implies that the attacking unit must be able to advance at the moment of attack (were it the corresponding APh), which it could not do if in possession of a Gun or otherwise carrying too much. D7.211 as worded suggests that a unit so encumbered may nevertheless have the option of using Street Fighting CC Reaction Fire. Noting that a unit may abandon possession during its own APh (A4.43), then a unit so encumbered would also have the option of abandoning SW/Guns before initiating regular Street Fighting, i.e. would meet the requirements for Street Fighting as long as heavy gear is left behind, as would a unit using it as CC Reaction Fire, as long as the SW/Guns that would otherwise prevent such an advance are abandoned in the originally occupied hex. I suggest there would need to be a subsequent Recovery attempt in a relevant phase if the unit returns there and wants their gear.
I know not everyone likes interpreting the rules quite so freely, but COWTRA will only take you so far (in spite of its mention in the hallowed first edition introduction), as the rules are rich enough and sometimes ambiguous enough to encourage or even necessitate interpretation.
Perry can't be everywhere at once... more's the pity