> Putting other countries laws aside, I believe that digitally manipulating the image of the real child in that way results in the production of the actual CSAM and as such is a federal crime.

No, it's not. People have been charged, but their convictions overturned. E.g: https://capcentral.org/case_summaries/people-v-gerber/

> As the United States Supreme Court found in Ashcroft v. Free Speech Coalition (2002) 535 U.S. 234, 250-251, “[v]irtual child pornography is not ‘intrinsically related’ to the sexual abuse of children . . .. ” The nexus between such images and exploitation of children is “contingent and indirect.” The images created by Gerber is akin to virtual child pornography since the superimposing of a child’s head on adult pornographic images does not involve the sexual exploitation of an actual child. Thus, mere possession of them is protected under the First Amendment.