I understand from a math/physics perspective why a microphone places betwen two sound sources playing slightly different frequencies "hears" the beat pattern. I don't understand why that still works once the two individual signals have made their way into your audio nerves and brain. (If I didn't have actual work I shoukd be doing now, I suspect I'd happily drop into a 6 or 8 hour wikipedia and google mediated deep-dive laymans research session.)
The "~1000Hz" upper limit is pretty close to a 1/4 wavelength for a "phased array" of two ears ~100mm apart. That'd make it pretty ideal for angular discrimination based on phase difference.