Refactoring stories were also rare, it was just sort implicit in the task, unspoken as part of doing it.
I'd imagine that is why they did not get cut.
But yes, management picked feature priorities, but left the implementation up to the team. So at any given time were were working on the "most important" thing from a business perspective.
While it "works" it is certainly not ideal that people have to go off the reservation to ensure that the project doesn't implode in the future due to the accumulation of buggy code, performance problems and likely security vulnerabilities.
That's not breaking down a story into smaller stories though, that's simply not doing some of the tasks necessary for a story to be complete. "Story" is not a synonym for "task"; a story is user-centric not about internals. "Write the documentation for this feature" is not a story and "write the tests for this feature" is not a story, they should be part of your definition of "done".