"The main loop of the shell went as follows:

1) The shell closed all its open files, then opened the terminal special file for standard input and output (file descriptors 0 and 1).

Unfortunately, the source code says otherwise.   None of shells V6, PWB, V7 do anything like is mentioned above.   They assume 0 and 1 (and 2) are already open.

The only fd redirection they do is when you do pipes or redirection on the command line.

Where this is done is, as I posted earlier, in /etc/init.    Init opens the tty device and dups it to 1 and then invokes either the shell (if we're in single user mode) or getty for interactive mode.

This was done in V6 and PWB (1).   In V7, init added a second dup for file descriptor 2.