It's a quirk of Agnus/Fat Agnus, I believe. It was fixed in later versions, but unfortunately most/all stock 500s have it.
IIRC agnus didn't support slow ram, it was something that was added for fat agnus. I imagine they wanted to do 1mb chip when moving to fat agnus but the time frame didn't allow for adding another address line to everything. When they got round to it they should have at least supported 4mb or even 8mb. Especially when they shortly afterwards upped it to 2mb anyway.
Even though 1mb agnus turned up in a500's, it was really only in the a2000 that it was configured to support 1mb chip. Probably for compatibility as alot of software assumes that 1mb is at $c00000.