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What on earth??? I've NEVER seen that system! I worked on many houses that were wired in those days and I found several different wiring methods.
Cloth wire on isolators, either twisted lamp cord or individual conductors for phase and neutral.

Cloth wire directly buried in plaster - groove the wall, secure the wire with a few nails that can be removed later, plaster and remove the nails. Result: the wires are solidly embedded and won't ever move again.

Cloth wire in conduit, two different types. Either only bituminated cardboard or bituminated cardboard with a thin steel sheathing.

And as an additional hack job method 2 with the individual wires wrapped together in news paper and then plastered in.

Both emthods make for nice removal if the plaster is soft - free the end from the box and pull - the wire will come right out and leave a nice groove in the plaster. Not advisable in presence of wall paper, the paper sticks too well and will remove large chunks of plaster.
Then scratch out some plaster with an old screw driver and put in new NYM cable. Minimal effort legal (but certainly not elegant) rewire.

Another nice thing with those old installs is the fact many hacks who tapped into those old installs just ripped up the wall somewhere in the middle of a run, spliced and buried everything in plaster. If the new spur is long and creative enough it gets close to impossible to guess where it actually originates. My dad's office (built in 1914) still has some of those miraculous wiring specialties.
Have a junction box with 2 sets of cloth wires leaving to the right. One is disconnected and used to feed the bathroom. The second one feeds 2 receptacles and a second room.
Receptacle 1 (closer to the junction box) has a feed of 2 PVC wires coming in from above and one cloth and one PVC wire exiting at an approx. 45 degree angle upwards (would lead to the switch box in the room next door). Right in the middle of that run you have a junction box with 3(!) wires just spliced. One is a phase, one a neutral and the third seems to be dead. Exiting towards the switch box: 2 cloth wires.
The switch box in the adjacent room has 2 wires entering, one cloth, one PVC... the feed to the light fixture goes up, but only the switched hot, no neutral...
The next junction box is above the door to room 2. Would be logical if the switch feed, light fixture and receptacle #2 were connected here. Well, not exactly. Box has the feed (2 PVC wires) come in from the left and pass to the right. Second: 3(!) wires just pass through the box from below and continue to the light... only 2 of which reach their destination.

Confused enough?

I don't even want to know what kind of hack job lurks inside that single wall... and exactly how many of them... all I know: a computer and a table lamp plugged into receptacle #2 will have the light dim substantially when the computer starts up.

Not to mention I'm pretty sure there's lots of disconnected sconce wiring still hidden in the room.

Unfortunately the room is crammed full, so there's no way we can rewire it. I'm considering a surface-mount conduit job though to reduce the fire risk.

There was a flat amored-type of cable available for burying in plaster. I have a Audels book that shows this, same thing "Wiring finished buildings". I've only seen it once, as recently as a 1940s house in a kitchen. I pulled on it and it snaked all the way up to the light fixture, where it tapped it's power.

To this day, the vintage hackjob that takes the cake for me is the bare steel wires run through an attic on spool insulators nailed to the rafters. The outlets that were fed off this circuitry went through K&T loom once they penetrated the walls. My words were literally "WTF?" At least the roof was steeply pitched and the wires were 7' up, out of accidental reach.

The story I heard from the old crusty next door neighbor was that these circuits were added during the war, when copper was needed for the effort. Original wiring was K&T from the 20's.

I've seen the "Hose Method" in Mexico, but they just leave the (garden) hose in the wall.

I found a similar situation in my mom's house (built sometime in the last 30 years).

There was a mystery switch on the dining room wall that didn't do anything. I traced the romex up into the attic, where it turned and went into the cathedral ceiling.
I disconnected it, and was able to trace it part of the way with a toner, but I lost it somewhere in the middle of the ceiling. No signs of any patches in the sheetrock that I could see. I still have no idea where it actually goes.

Anyway, my mom wanted some hanging lights over her dining room table, so I cut in a box high on the wall, cut the romex, and reused the switch to feed a switched outlet to feed the lights. The cables swag in decorative chain over to the wall.
I landed the load end in another box inside the attic for future use if the other end is ever located.

I've seen the stuff for sale in Mexican electrical stores and Home Depot stores. It's not really garden hose, just a flexible plastic conduit. The stuff I saw was usually in orange.

1: it may not have been a violation in 1939 (I can't swear to it, but I saw an early 1950's US code book once that wasn't much more than a large pamphlet.) having said that, it may have been generally considered a bad idea.
[edit:I just re-read the description and looked more carefully at the pics. -code or not, it definitely looks like one of those master "jack of all trades" executions]
great historical B/G on the place too (seriously, neato)

2: I was on a remodel once where they (the owner/ remodeler) found a cotton contract from 1897 tucked in the wall

My neighbor is a plasterer, and has been working remodelling a few very old buildings; a few months ago, he found a few dozen sheets from two Harper's Weeklys from 1862, which included some incredible woodcarvings (a few of the 2nd Battle of Bull Run) and a number of extremely interesting articles and advertisements...

Old papers are just really neat to read.

Look on the bright side, you got to enjoy reading those old news articals.

if something lasts 70 yrs, can it really be considered 'hack'?

What do you consider the leaning tower of Pisa?