There was one point in Daggerfall where I had screwed myself by having only one save in a dungeon where an ancient Lich had spawned at the entrance to the dungeon. So I modified the z.cfg file, modifying the cheatmode to 1. I went back into Daggerfall, did the godmode cheat to get out of the dungeon, then went back into the z.cfg file, turning cheatmode off. Then I forgot about the game for a couple of months.

Now I've gotten right back into it, and it took me about 5 hours of playtime to realize that I was surviving some really impossible situations. Like, falling off of really high ledges, or fighting multiple enemies at once without getting hit. The only thing killing me was drowning. Then I remembered that terrible dungeon.

Does turning cheatmode off after activating godmode not turn off godmode? Does changing the controls alter the keys that you need to press to activate cheats? Or have I gotten really lucky?

You might want to turn cheatmode back on, toggle godmode again (test it to see if you start taking fall damage or can get killed by a skeleton), and then turn cheatmode off. In my experience, I wouldn't trust any of the settings in Daggerfall to work so easily.

BOX MAAAN is probably right. Many games back then required a cheat code to toggle cheats before they'd work, but it didn't toggle the effects themselves, just the ability to use them. So the cheat effects would be persistent if you didn't toggle them individually off again.

I have a playthrough like that as well and the only way I can die is if I reach somewhere by fast travel and my stamina is empty or lower. Couldn't even get arrested either (so my legal status would go back to normal after me going on a mandatory lycanthropic rampage before I got hircine's ring that got that under control) cause the guards can't hurt me.