I did a survey of some old MAME source and version 0.111 behaves the way you describe, parsing mame.ini followed by exename.ini, but version 0.122 no longer parses exename.ini, so the change happened somewhere between those two versions. I'll try to narrow it down.
The bottom line is that it's been at least 5 years since MAME behaved the way described in that documentation. I don't know if it was a deliberate change, or if someone just rewrote the code and forgot to put that feature back in.
GroovyMAME support forum on BYOAC
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