concerns regarding back-compat with older firmwares

The MegaSDs 1.04 firmware introduced some rather useful features to MD+; built-in song fading, setting a tracks loop type in the cue file, etc. Since these features weren't there from the start, do other developers take that into account? If so, to what extent?

That firmware was the first release after the product was first sold with the original 1.02 stock firmware on it, so those things have been there from the start, pretty much. The loop feature has always been used, but the fade commands weren't really used, widespread, until we got a proper implementation of MD+ with Genesis Plus GX, mainly because the original MAME build that supported MD+ didn't have the code to support fades.

A lot of the early patches don't have fade coding, but the more recent ones, since the Genesis Plus GX implementation, most likely do.