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IOS16 was originally a leaked IOS from Nintendo's Wii Backup Disc. When Nintendo went to fix the fakesigning bug in all versions of IOS, they didn't think to release an updated version of IOS16 since it was never publicly distributed.

After that update, IOS16 was left as the one last IOS with the fakesigning bug. It was then pirated to downgrade prior to the System Menu 4.0 update, primarily to assist in piracy.

IOS16 was added to the NUS servers with the 4.0 update to patch this loophole. The version distributed on NUS as version "512" is a non-functional "stub" IOS whose only purpose is to serve as a placeholder for the IOS16 slot rendering it useless to pirates and those who seek to use it for non-official purposes.