Are we speaking about the same type of injection system? I'm talking about a Speed Density System, perhaps Speed Velocity is just another name for the same thing.
In a way your correct, other than a wide-band, the O2 sensor doesn't really measure the A/F ratio, the gradient of voltage vs O2 is too steep and too variable with temperature to make a calibrated or accurate measurement. But, the voltage always crosses over right at the magical 14.7:1. Thats why its often called a switching O2 sensor. The engine computer looks at the rate the O2 sensor cycles back and forth between the switch over point to get a close approximation of the A/F ratio. The engine computer plays a constant bracketing game, bouncing the fuel amount slightly up and down, and moving that richer or leaner, according to how much time the O2 sensors stays on one side of rich/lean compared to the other.
Never heard of a Long Term Closed Loop Status, most speed density system operate at either Open Loop or Closed Loop. Again, maybe the same thing, just different terms from a different implementation.
Now perhaps the Jeep system is different, most of the Chrysler systems from this point on (which Jeep was well inside the Chrysler Fold in '94, but not totally converted over to Chrysler technology). The single O2 sensor provided feedback to the engine computer to how close the fuel input was too the stoichiometric point, and it adjusted accordingly. But in conditions when an A/F ratio was needed other than 14.7:1 (warm-up and Wide Open Throttle (WOT)) or the O2 sensor had NOT reached operating temperature to accurately respond, the system would be in Open Loop, meaning feedback from the O2 sensor was NOT read at all, i.e. the feedback loop was open. In open loop, the fuel was adjusted purely off a stored table with engine speed and air density and several other parameters as input, without any fine tuning from an O2 sensor. Chrysler, as well as others, system is adaptive, so the corrections from the feedback would be stored as a corrective table, usually an indication of volumetric efficiency, to apply corrected values to the stored fuel table when in Open Loop mode.
It was with the OBDII mandate, that all emission equipment on the vehicle had to be tested by the engine computer itself, including the CAT, did Chrysler add a 2nd downstream O2 sensor. The idea being, if the CAT was working correctly it would change the oxygen content in the exhaust as it completed the chemical reactions to break down some of the pollutants. Thus if you used an O2 sensor after the CAT and compared its output (rate of switching) with the O2 sensor already in use before the CAT, a correctly working CAT would show a difference between the 2 O2 sensors and NON-Working CAT would show NO difference between the sensors. I believe Chrysler holds a patent for this.
My '95 XJ, 2.5L 4 Cyl has ONLY ONE O2 sensor, because OBDII wasn't mandated to start until the '96 model year. I don't know for sure, but I thought the '94 and '95 power trains were the same. Like I said, it may have been different between 6 cyl and 4 cyl.
As well, I'm sure the implementations of fuel injections systems is different in all sorts of vehicles. Perhaps I'm wrong, I'm talking about the system I've learned about that has been on the Neon and Mini-Vans for years (my other cars). Maybe Jeep had a different way of implementing the O2 sensor then. Would you be talking about the Renix system? Wasn't that long gone by '94 and '95?
As well, I'm not saying your wrong, but I don't understand how 2 switching O2 sensors would work together to correct one or the other. They should switch at the same rate, unless the O2 content changed in the exhaust (only with a CAT inbetween), and how does that help determine the A/F ratio better? If its a matter of correction until the O2 sensor reached proper temp, I'm not sure how an O2 sensor further down the exhaust helps, it would reach operating temp later, not sooner. Besides, that is what the heaters in the O2 sensor are for. A single heated O2 sensor has to be cheaper than 2 non-heated O2 sensors.
I've heard of other pre-'96 vehicles that had 2 O2 sensors, always assumed it was just the manufacturer had implemented OBDII early in that particular car. Perhaps these vehicles run off the implementation you speak of, but I don't really understand.