Your straw man doesn't work. In a trivial sense, we are machines. There's nothing magic between quantum mechanics and a fully functional brain. Our soul is material, made up of neurons and other cells.
Just like a man-made machine, we are physical processes. We're just much better at self reference than the machines we build.
You've contradicted the statement that you made elsewhere - that it's the arrangement of atoms that matters. There's nothing magical about the processes, but the specific state matters.
The boundaries are not arbitrary, to the extent we can factor the configuration space. For instance, we can draw a rather sharp limit between me, and the keyboard I'm typing with.
Just like a man-made machine, we are physical processes. We're just much better at self reference than the machines we build.