I thought someone would point that out (not possible) while I was writing it, but that's what I recall he said (he may have said "not OK" rather than "not legal" but remember this is over 30 years ago conversation). Anyway, good to see someone was paying attention! Dale, you get a gold star!
Which begs the question, for me anyway, how did he get the -100% flasher to flash so much but the overmod flasher never did (assuming it wasn't just disabled)? That's why I'm thinking he had the -100% flasher calibrated to something less than 100, for show essentially. Since I had not had a chance to visit the transmitter site, I didn't know if he had another monitor out there or just set mod with a scope (probably).
However, there is the little detail that the variable flasher would indeed flash in unison with the -100% flasher when set to 100% and not flash at all at 101% - Apparently it could not flash at 101% if such is impossible, which it is. But it did still flash in unison at 100. It, too, could have been calibrated so that 100=90 but then it would still flash once in awhile when set higher and it didn't. I don't recall that the demonstration lasted very long but knowing me I would have been trying that 100/101 thing at other times when he wasn't in the studio and I don't recall ever getting a different result.
Also, I did not get to see the modulation on a scope at any time.
The audio didn't sound like it was being run through a brick wall clipper, although on AM one could probably get away with that more readily than on FM. I do know there was never a trace of overmodulation splatter.
I should just ask the fellow, but he may not remember after all these years. A lot of water under the bridge. Given the subject matter (my accusations of "cheating") I won't mention his name, but it came up in the discussion Fossil and I had the other week and he thought he remembered him.

We are such a small town.