The authentication by IP is a function of minilogin's code. This login server does a hand-off to the world but it is the login server that tells the world what account the worldserver should be expecting.
The "world" executable is incapable of doing game-client username and password validation on its own. If you're seeing password validation, you're probably looking at the telnet or HTTP interface portion of the code where GM's can use these to manage the server.
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<idleRPG> Rogean ate a plate of discounted, day-old sushi. This terrible calamity has slowed them 0 days, 15:13:51 from level 48.
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