Hm... Interesting, I worked on a SLC500 that had 4 banks of 3 thumbwheel switches (not my build but done by another company) we did a mod on it and I know the O/F bit was not in the reset in the code as I managed to fault the PLC on one, this was my code causing the problem not the existing and they never had a problem in the previous 12 years I seem to remember these were the pushbutton types but have no idea of the make, these also used the BCD to Dec conversion, talk about coincidence I was talking to the guy who was engineering manager on that plant only yesterday.
It is of course high;y possible that the T/W values were only being FRD'd at a particular point in the process, and not done continuously.
The likelihood of the input bit pattern being illegal at that time would be drastically reduced ...