It would come up pretty often actually - at 1st level, thief and magic user needed a 20 to hit AC1, so using THAC0 to calculate hits even on normal ACs wasn't technically correct for either of those hit tables, as you'd end up with effectively a +1 bonus. My experience is that people tended to just ignore this since it wasn't a big deal, but you hit that part of the table right off the bat at 1st level with two common classes against any armor class.
No, really it
wouldn't come up that often - AT FIRST LEVEL (or low levels). If a DM is sending 1st level 1E PC's up against things with AC's that good, when even the fighters will struggle to connect at all with a weapon, then things in that game are significantly askew. The fact that thieves and MU's for several levels needed a 20 to hit AC1 when everyone else only needed 19 just wouldn't matter much though. By the time PC's ARE fighting opponents with that kind of AC on any regular basis the fighters in the party have a better chance to hit because of their more rapidly improving matrix, and they as well as thieves would have hopefully acquired a magic weapon and other magic boosts, and the MU's would just not be as concerned with their sucky weapon combat anymore because they have a larger number of available spells to cast. Their poor attack matrix doesn't matter as much even as they begin to face higher AC opponents.
And FAR too many people don't use the matrices correctly in the first place, or understand what those repeating 20's
really accomplish. The effect, even when PC's are advancing in levels, is to ensure that PC's CAN hit opponents with very, very good (very low) AC's when they otherwise wouldn't (and the reason they wouldn't is because in the cases of characters like thieves and MU's is that they generally have poor bonuses to-hit). The
default way the 1E matrix is handled is that although the chart says you need a 20 you still apply whatever bonuses you can to that, so those
1st level thieves and MU's can still hit
AC -4 without having a single to-hit bonus in their favor, and yet if they do have bonuses they obviously improve that chance. The OPTION for handling the 20's on the matrix in 1E was to say that the second and subsequent 20's on the chart meant that you needed a natural 20 on the die no matter what,
and all the bonuses you might have otherwise have added to that don't matter. A 1st level thief or MU could still hit up to AC -4 opponents but their chance would only be 5% - having that natural 20 on the die - no matter what to-hit bonuses they had. The same would then apply to fighters. With the option, a 5th level fighter can hit that AC-4 monster with every point of to-hit bonus he can scrounge - but to hit an AC-5 (or better) monster he needs a natural 20. All the bonuses he has then don't matter and don't add in. He has a 5% chance to hit it by rolling that natural 20, but that's IT. Yet he has the same chance to hit AC -10 (he'd need a +1 to-hit from somewhere but still needs that natural 20 on the die). That is
almost, but not quite, the same as, "20's always hit."
The
option of needing natural 20's then significantly influences combat for higher level PC's by
invalidating all the added bonuses they might have. It's also then an equalizer when both a fighter and an MU might need natural 20's to hit an opponent. A 7th level fighter and a 7th level MU both need a natural 20 on the die to hit AC -7 using the optional rule. Without the option, the fighter can pile on all his bonuses and stand a far better than 5% chance of hitting while the MU's chances aren't much altered.
The opponents are, except in a few corner cases (generally being the DM getting out of hand), all going to be hittable by everyone in a 1E game at any level. The question is HOW hittable, depending on whether you use the matrix default or the option of needing natural 20's. In 1E, THAC0 is only a shorthand to avoid possibly needing to consult the combat matrix. It does not function the same mechanically, or have the same implications that it does in 2E or other editions. Using a THACO system to-hit INSTEAD OF the matrix with the repeated 20's (and not accounting for what those repeating 20's are doing) has undeniable impact on how 1E plays. But it DOESN'T much matter at low levels at all because the PC's have so few bonuses to apply and the opponents they typically fight don't yet have the really good AC's that the repeating 20's affect.
Edit: oh, and mixing editions did largely end with 3E. Though it was likely declining a lot with 2E with its avalanche of splatbooks providing an overabundance of options that would otherwise have been made from scratch or borrowed from other games, 3E nailed the coffin shut. There was a deliberate design focus that said, "Simply
making PC's out of all the options is where a big part of the fun will be found." It wasn't that actually playing the characters was
supposed to be a secondary consideration, but when SO MUCH emphasis was placed on character builds and options that was the effect. And when actually playing the PC's is a widespread secondary consideration to designing them, you don't need to look to other RPG's to borrow rules and ideas to make your game unique or keep players interested/entertained.
This is part of your confusion I think.
