This is what I am thinking too, I am thinking there can be a way this can be manipulated to generate a known private that can be known to the ATM operators.
I would not go that far. But the ATM operator storing a database (for at least 6 months, but probably forever) with the private keys generated by its devices would be simply normal.
Whether "a rogue employee" (or the operator itself!) sweeps or not those paper wallet after some while, that's another story. I would clearly not take chances.
