I have two (wanting to sell one, a Mitsumi, the other is a Laser) AT/XT switchable keyboards and one auto sensing BTC, and an XT motherboard that wants a case.
As I understand it, "going backwards" to XT compatibility is 100% the responsibility of the keyboard, and that the keyboard would be AT compatible and have technology to sense the computer it was attached to (perhaps the presence of power but lack of signals within a given timeframe, since it's a unidirectional interface, is how this is done).
That change would most likely involve two things: changing the clockrate of the keyboard (since I think it's different), and changing scancode set to something set-1 compatible (basically what you said).
The problem, as far as testing goes (I'd set up that XT board and go for it) is that my XT motherboard might itself support AT keyboards...it has a date of 1989 somewhere on it so it's at LEAST that young, possibly younger. If it supports AT keyboards, then I don't know if a connected Model M is switching to XT mode or if the motherboard is switching to AT mode (I do know it works with XT keyboards).
Bleh, tired mind, complex thoughts. Or so they seem to the tired mind.
And wasn't the first Model M on the XT 286? Or at least that's where the layout appeared, I know that much, and the XT 286 was before the PS/2 and even the AT.
edit:
point 1 - I've discovered confusion in re-reading my post and edited as appropriate, for this thread let's use full words - motherboard and keyboard
point 2 - this is obviously an XT-class motherboard, not an actual XT motherboard.