Well, it's a bit ambiguous. The rationale given on page 25 of the 1E PH is really the same as in 5E, just before they formalized armor proficiencies. But under The Character With Two Classes (p33) they do restrict humans, despite them also having training. "The character may mix functions freely and still gain experience, although restrictions regarding armor, shield,and/or weapon apply with regard to operations particular to one or both classes."
1E kind of goes both ways on it and is wishy-washy about it. No clear consistent rationale given. They don't explicitly say "this is a special thing for demi-humans", but that's the effect of the rules.
2E, and 3E following it, went with the more restrictive interpretation for everyone. That armor interferes with arcane magic. Period.
That rationale was around lo-o-ong before 2e, though; given that it was explained to me that way in 1982 when I first started playing.
Well, no naughty word. Obviously some players and groups thought the restriction under the Character With Two Classes section made sense to apply to everyone. But per the actual text, it was not the rule and did not apply to multiclassed characters for the first 15 years of the game.
2E, and 3E following it, went with the more restrictive interpretation for everyone. That armor interferes with arcane magic. Period.
I didn't play a lot of 1E. Though I played quite a bit of 2E and 3E, and I remember what a pain it was to have to work around the armor restrictions. Contrasting that with 4E, 5E, and B/X (which I've gotten to play a lot more since the pandemic), it's pretty quite clear to me that the more restrictive route doesn't necessarily lead to a better or more balanced game. It's more a matter of preference. Allowing characters to freely use their abilities is generally more fun for players. Some amount of hoop-jumping (like acquiring proficiencies) may be worthwhile as a nod to balance without making the restrictions onerous like they were in 2e (and to some extent, 3e).
I'm fine with restrictions like these if only because they work against multiclassing, which can otherwise quickly get overpowered in any edition. That, and IME mages (and thus, F-MUs) can still get down to some pretty good AC values through the bracers-dex-ring of protection route.
For our games, though, we ages ago allows Humans to multiclass just like other species as the strange Gygax dual-classing system made no sense.
Dex doesn't apply to AC while casting per the rules of 1E. Once again you're interpreting the games and editions through the lens of your personal table. And making a Fighter/Mage dependent on finding bracers and rings to do their shtick is pretty cruddy. IME.
As for whether multiclassing is overpowered... it's a tricky thing. It gives more options, but between the split hit die and the slower leveling, it generally means a substantial reduction to hit points if you multiclass Fighter with M-U. Even with full armor usage, you're inevitably more fragile than the true front rank warrior classes, and your fighting and casting are a bit inferior to the single classed characters. And you still are subject to being able to do only one thing on any given round.
The bigger imbalance is, of course, all the free powers demihumans get. Especially elves. As you say, the class and level restrictions in 1E, while well-intentioned in terms of evoking an implied setting, were never actually balanced. Making every race use the same multiclassing system and giving humans racial benefits like every other race were two of WotC's key innovations, and ways in which their editions are manifestly better balanced and designed than TSR's.
I DO think that giving demihumans different options can work and be balanced. This is one reason I like B/X so much. Demihumans work differently than humans and have different advantages and disadvantages, but these things are factored into their xp charts directly and the classes are gated behind minimum ability score requirements, rather than races giving bonuses ideally suited for min-maxing. In some ways I think race as class is actually superior design because it allows you to have the flavor of the implied setting without the min-maxing which race & class mix & match has always enabled and encouraged.
My AD&D era pet peeve; humans should be multiclassing, demihumans should be dual-classing.
Humans are described as ambitious and versatile, with shorter life spans; they should absolutely be the race trying to do multiple things at once.
Demihumans have level limits, and hundreds of years to spend; why wouldn't they be the ones to serially try other careers after mastering one?
Totally agree.
This is one of those things that seems to be rooted in the source fiction and doesn't make sense otherwise. Fafhrd and the Grey Mouser, in particular, having apprenticed in one career before switching to another. I think there are at least a few heroes in the inspirational fiction who did this, and the mechanic was designed to emulate. But those heroes happen to all be human.
