From most accounts Jason Jones near the end decided the pistol was too weak so he coded it to automatically increase the strength of the pistol over what values they entered for it by a certain amount. Hence the pistol that it ended up with was born. The way he did it prevented them from reverting the change too due to them not figuring out what he had done till too late.
And that was for campaign.
It really didn't matter much though since the entire Halo 1 multiplayer sandbox is broken, and I don't really consider it a bar or a blueprint to build off of. The H1 Pistol certainly doesn't belong in any of the later games.
Shit, if I made an FPS I'd just throw a 2SK pistol in there and call it the Better Than Halo Combat Evolved's Pistol Pistol