Is there more on this proposal (e.g., a preserved document)?

Something I found especially interesting is the decision to not implement "STX abs,Y" and "STY abs,X", while the decoding matrix would have easily provided for this. Was this to keep the instruction set arbitrarily simple (as in explicitly not orthogonal)? Or was there a more serious architectural conflict? Or was this just a legacy from the 6800, which had just a single index register, thus lacking a similar option?

(I added a note on this to the article.)

Most of what I know about that comes from Brian Bagnall's books (e.g. Commodore: A company on the edge). It's covered in the first chapter. I don't know of any preserved documents - if they exist they'd belong to Motorola, and I'd expect the leavers would have preferred to ditch any such documents (though part of the reason for the settlement with Motorola was that one of the engineers stupidly taking 6800 documentation with him).

This [1] summarizes it. Here [2] is an interview by Computer History Museum of Chuck Peddle. It matches up with the first chapters in Bagnalls book very closely. From about 50 minutes in he talks about his meetings w/Motorola customers that told him the 6800 was too expensive. From about 58m in they talk about basically setting a size metric for the chip to meet a low enough price point. So the starting point was what they could fit in small enough space.

You might also like the Computer History Museum interview w/Bill Mensch [3]

[1] http://www.cpushack.com/2013/08/03/mos-technology-mcs6501-pr...

[2] https://www.youtube.com/watch?v=enHF9lMseP8

[3] https://www.youtube.com/watch?v=Ne1ApyqSvm0

Thanks! I'll have a closer look at these. – Admittedly, I haven't looked deep into Chuck Peddle's history (besides anything related to the PET), yet.