That's not quite true. Version 1.0 didn't have a 1MB limit, but instead used the same 0x2000000 byte, or 32MiB limit, used for any serialized data. Satoshi later added MAX_BLOCK_SIZE so that miners wouldn't create blocks bigger than 1MB, but larger was still accepted.
That is interesting. It sets a "harder" max block size, even if the 1MB limit is increased.
To increase the limit beyond 32MB, it would be necessary to change the message structure, or allow blocks to be split over multiple messages.
The commit comment is deliberately misleading: "only accept transactions sent by IP address if -allowreceivebyip is specified"
Any reason to make them misleading? It would seem like a recipe to making alt-clients incompatible.