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Do we know when and why this was cancelled out? I'm guessing that it was to do with a mass invasion of demons during or at the of the Heresy, though am curious as to who overruled it, their motivations etc.

The obvious choice would be the emperor, though for someone as big as "Him" to go back on his word would seemingly sew doubt to me, which makes me think it may have happened down the line, perhaps after emps internment on the golden throne? Maybe by malcador if he was still around?

Has it actually been covered off in the fluff yet?

It might be better posted on the background forum, but regardless there already was a thread about it a while ago, you might want to check it out:
http://www.dakkadakka.com/dakkaforum/posts/list/517830.page