Perhaps the most retarded idea so far in this house is the second floor walls. See, this house has rock-solid plaster- and-lathing for most of it's walls.
It's very durable, and there are houses that are over 200 years old where the original walls are still there. Now when this type of wall gets holes or scratches, all you need to do is take a $1 drywall spatula, and a $5 bucket of mud, and smear it over the affected area, then smooth it with the spatula. Usually, you don't even need to sand, but you can if you want it to be perfect. Then you can paint over it, or wallpaper.
Well, in this house, they apparently must have felt that having walls that were hard as rock reminded them of living in a cave or something, so they covered the plaster up with El Cheapo wood paneling (remember back in the 1960's when people thought that wood paneling was classy?). Who knows how long it was just the brown wood paneling with it's artificial veneer finish, covering all the walls of the hallway.
Hallway? Usually, you would put that kind of paneling in a study or den. They paneled the whole hallway, but none of the rooms. Then someone, probably a later owner, decided to paint the paneled walls, rather than remove them and have nice smooth plaster walls to paint on. They must have wanted just that little extra touch of class, so they used high-gloss paint. They didn't use just any high-gloss paint, either. They used high-gloss pale ORANGE paint.