I always figured, as Stormdale said, it was codified by the goldbox games (Pool of Radiance and its 3 sequels, Champions of Krynn and its 2 sequels, Gateway to the Savage Frontier and its sequel, and then Unlimited Adventures and however many modules they've got for that now), which used mostly 1st ed rules with more 2nd ed rules as time went on (probably by mistake). The games came out from 1988-1992, roughly at the transition between the first two editions, and the construction set lets you see the XP and the like for the monsters, some of which have 1e XP and some of which have 2e XP. Similarly I think in Pools of Darkness (one of the later entries in the series) the fire giants had 1e stats and the hill giants had 2e stats; a major boss battle is with Thorne, a red great wyrm as per 2e, flanked by seven huge ancient red dragons as per 1e (and Thorne's breath weapon even does a random amount of damage, as per 2e, while his helpers' breath does their maximum HP, as per 1e!).
Reducing a character or monster to 0 HP would produce the message 'SOAND SO GOES DOWN', and it would be stable at 0; if you put it to -1 to -9 HP you would see 'SOANDSO GOES DOWN AND IS DYING', and the character would indeed lose 1 HP every round until dying at -10; if you reduced it to -10 HP or less the message would be 'SOANDSO IS KILLED'.
In some of the earlier games this was a way to raise characters; it would apparently store dead characters' HP as 0, so you would cast a weak damage spell on them (say 'cause light wounds', which did 1-8) to reduce them to -3 or so...they were now 'dying', so you would bandage them and they were now 'unconscious', i.e. alive.
