why did MTH do this?
To offer model railroaders a choice. For the past several years, MTH has made many of their engines in both high-rail and scale models.
Engines with product numbers ending in -1 are intended to be run on high-rail 3-rail track and have bigger flanges. Diesels with a -1 also have swinging pilots. The smallest curve on which these engines can negotiate is indicated as the diameter of the circle.
Engines with product numbers ending in -2 are intended to be run on scale 2-rail track and have smaller, scale-sized flanges. Diesels with a -2 also have fixed pilots. The smallest curve on which these engines can negotiate is indicated as the radius of the circle.
On diesels, wheel sets are available for changing the nature of the flange to make it larger or smaller.