Dolby NR encoding - did it ever work

Yes, Dolby B and Dolby C both work. (Dolby A was a professional system.) They require careful level matching however, and that meant that many consumer rec0orders were often out of Dolby alignment. Better recorders such as Nakamichi offered built-in matching alignment tools.

"11-09-15: Raymonda
... all Sony D 5's engaged a brick wall multiplex filter when dolby was engaged. This cut off all frequencies above 14,000 hz."

No, this is mistaken. First, it wasn't a brickwall filter at all. What the Sony had was the same multiplex filter used by other cassette decks of the era, although some did allow the filter to be switched in/out independently. The filters were designed to gently roll off any of the FM stereo pilot tone (which is at 19 kHz) that might be passed on from an FM tuner. Absent a filter, the tone could "fool" the Dolby circuitry into thinking the signal had HF content, thereby compromising the Dolby circuit's effectiveness at reducing HF noise. These Dolby circuits were on chips that included the multiplex filter.

It was possible to make excellent recordings using a Sony TC-D5 or TC-D5M. If Deadheads had trouble doing that, it had nothing to do the the Sony's multiplex filter.