In a nutshell, there are 2 reasons why they make 20lb min ff'ing weight seats. Well, maybe 3.
1. Higher weight rf'ing seats haven't always been available. At one time 20 or 22lbs was the max rf'ing limit available. As a result, laws were made to reflect 20lbs.
2. The information that rf'ing is safest is still new to many parents, so there are still people looking for a seat with lower weight limit. This has nothing to do with safety and everything to do with sales. Even Britax has a 20lb min ff'ing weight limit on the MA and RA, so it's not something that Evenflo is alone in doing.
3. There are older kids who don't hit 20lbs until they're 3yrs old. A 20lb 3yr old is actually safer ff'ing than 28lb 13month old because their head to body ratio is more proportionate, and their spinal column has ossified more.
The spinal column doesn't finish fusing until between the ages of 3 and 6, so a 1yr olds spinal column - ie the bones and the space between them, can stretch further than the spinal cord can. This means that in a collision with a lot of force, children's spinal cords can be completely severed resulting in instant death. That outcome doesn't happen all that often, but if you could completely eliminate the risk by keeping a child rf'ing beyond the minimum, then it only makes sense to do it.
As for the 1" rule, I'd have to read the entire manual to see if it's in there. I know that some manufacturers are conservative when setting height limits thinking that most kids won't have their head within 1" of the top of the shell by the time they hit 29". Every child is proportioned differently though, and it doesn't matter what country you live in - a baby's head striking the interior of the vehicle is never a good thing... crash dynamics are the same everywhere.
Transport Canada has a handout called 1-2-3-4 Car Time. The Stage 1 - Rear facing section specifically states:
http://www.tc.gc.ca/roadsafety/childsafety/1234/stage1/menu.htm
Don’t be in a hurry to start using a forward-facing child seat. The longer you use a rear-facing infant-only seat, infant /child seat, or infant/child/booster seat that fits correctly, even past your baby’s first birthday, the safer your baby will be in a crash. Be sure to follow the manufacturer’s instructions for use and check the label for the weight and height that are allowed.
It also says under "securing your baby in a rear-facing seat":
Check where the top of your baby’s head lies on the back of the seat.
* If the top of your baby’s head is less than 2.5 cm (1 inch) from the top of the seat, a bigger seat is needed.
The simple explanation for the headroom being needed, is that in most collisions, the carseat is going to rotate downwards towards the front/floor of the vehicle. During this initial stage, the baby is going to slide up towards the top of the shell. The harness straps have some natural stretch to them under high forces, that will allow even a tightly harnessed baby to slide up a little. Without that 1" space, there is no guarantee that baby's head won't slide above the shell and impact another surface in the vehicle.
As for your question about why the top set of slots are there, babies are proportioned differently - some have a longer neck or a taller head than others. It's quite common for babies to outgrow the SS1 right about the same time as reaching the top slots. Other babies use the top slots for months before outgrowing the seat. It's all about proportions.
Also check that when looking at the slots, you are checking the height against the shell, and not against the cover. If your little one's head is that close to the top of the shell and the shoulders are still below the top slot, than I would say it is even more important to keep him rf'ing past the minimums. The top harness slots are low enough that I'd hazard a guess that with shoulders below them and a head near the top of the shell then your little one still has quite a large head in proportion to the rest of his body.
There's an interesting diagram on this site here that might help you understand proportions as kids get older. There's also excellent rear facing information there. (Yes, the site is in New Zealand, but crash dynamics are the same world over. Statistically in Canada, frontal and side impact collisions are the most common.)
http://www.childrestraintsafety.com/rear-facing.html
You'll also find a picture of the different stages and ages of spinal fusion.
This particular website is run by a member here who flew to the US to take the CPST course, so it is very reliable information. :thumbsup: