You need to study the office action but my suspicion is that the examiner is taking the position that a claim that references another claim is, by definition, a dependent claim. The examiner is then taking the position that a dependent claim must necessarily be of the same statuary class as the claim it depends from since, by common definition, it is a narrower version of that claim. In your case the claim is to a machine, and the claim it depends upon is a claim to a process, so rejection.
The MPEP - in a very odd place - says the examiner is wrong -
The fact that the independent and dependent claims are in different statutory classes does not, in itself, render the latter improper. Thus, if claim 1 recites a specific product, a claim for the method of making the product of claim 1 in a particular manner would be a proper dependent claim since it could not be infringed without infringing claim 1. Similarly, if claim 1 recites a method of making a product, a claim for a product made by the method of claim 1 could be a proper dependent claim.
Dependent Claims - way down in the discussion of fee calculation
By a careful reading of the MPEP above we see that a narrowing of the depended upon claim is only taken to mean that anything that infringes the dependent claim necessarily infringes the depended upon claim. Your case is not in the examples but the analogy is clear.
BUT, it is not worth arguing with the examiner, just paste in the steps of claims 16 and pay for an additional independent claim if you are over the three "free" ones.