The language you are quoting first appeared in the 1987 NEC, back when it was in Article 324-4. Before adoption of the 1987 NEC, there was no restriction, as far as the NEC was concerned.
This issue is not black and white. When was the '87 NEC first enforced in the jurisdiction where the insulation is installed? Adding insulation over already insulated K&T is something different than insulating K&T for the first time.
Given that K&T was effectively no longer installed by the '50s, I have to ask, how many of those original concealed K&T installations in open (un-insulated) stud and joist cavities actually survived energy conservation efforts prior to enforcement of the '87 NEC? Darn few, I'll bet.
Of course we see K&T fully enveloped in insulation, and it was blessed by the NEC's silence, until the 1987 NEC went into effect.