In fact, TOS 1.6 was released with the STE before TOS 1.4 (at least in the UK) After the STE was released all the STFM's that were still made got 1.4 and it was also offered as an upgrade to existing ST's. TOS 1.62 came out about the same time as 1.4 IIRC. (My first ST was the STE, it had just been released and had TOS 1.60. At that time they were the same price as the FM (£299) just for a couple of months then they went up to £399).
BTW I think the term RAINBOW TOS was coined when the STE came out, but it got used for 1.4 instead of 1.6/1.62.