Yeah so if it was me I’d have the 16 outputs of the MS16 connected to the 16 TAPE IN jacks on channels 1 ~ 16 of the M-520. I would assign channels 1 ~ 16 to PGM groups 1 & 2, setting the PAN controls to taste. Then the PGM GROUP OUT jacks 1 & 2 would be connected to the master recorder inputs. I would monitor my stereo mix by setting the sources of the MONITOR mixer channels 1 & 2 to BUSS, PAN channel 1 hard L and channel 2 hard R. I would then set the source of the MONITOR SELECT switchrack to MON. I would then be able to monitor the stereo mix in the headphones and in my studio monitors via the STEREO A buss. I would connect the outputs of any send effects devices that are fed by the AUX busses to M-520 channels 17 ~ 20, and also assign those to PGM groups 1 & 2, again setting the PAN controls to taste. That’s how you get your wet final mix, and you’re feeding the master recorder with the most direct summing path (vs using the STEREO A or B busses, which go through the MONITOR mixer and additional circuitry all downstream of the amp stages that fee the PGM GROUP outputs), but also have the independent flexibility to monitor that mix as well as setup separate monitor mixes if needed using your unused PGM groups, and of course you can always solo-in-place any input.
You’re right. Lots of flexibility with the M-50/M-500 consoles. And as I’ve said before you can do whatever you want to do, but the functions and features of the STEREO A and STEREO B busses make them ideal to be used as your control room and studio feeds respectively, which is what Teac intended.