Here are some excerpts from my copy of the 2014 draft standard N4140
22.5 Standard code conversion facets [locale.stdcvt]
3 F
It appears your first conclusion is shared by Microsoft who enumerate the possible options, and note that UTF-16, although "widely used as such[sic]" is not a valid encoding.
The same wording is also used by QNX, which points at the source of the wording: Both QNX and Microsoft derive their Standard Library implementation from Dinkumware.
Now, as it happens, Dinkumware is also the author of N2401 which introduced these classes. So I'm going to side with them.