@ Bhargrave
Yes, assigning the SEP client on your SEP Server as a GUP should work without a problem.
But I am unsure , how it would help you improvise SEP M infrastructure!
If you want the clients to fail back to a default definition provider , then you may enable option
"Maximum time that clients try to download updates from a Group Update Provider before trying the default management server:" in SEP Manager -> Live update policy and set the fail back time.
If you are running MR6 and above then you can have Multiple GUPS , SEP clients will search for GUPs in its subnet first , then jumps to other GUPS if the previous was unavailable.
If you Assign multiple GUPS in SEP Manager then SEP should download definitions fine