I remember watching an old interview with James Cagney who (for the youngsters here) starred in several gangster movies back when they were all the rage, in the 1930s. He was asked about the use of guns on set and specifically about the realistic bullet impacts near him in gunfights. He was pretty blase' about the whole thing. They just used real bullets.They use live ammo for some shots.
It's amazing to see both a high-dollar actor and real bullet impacts in the same shot.
ETA - Found the clip.
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