I think they were passed around until someone needed a wedding cake and then they were covered in marzipan and Chobham armour like icing. These were cut up and sent to people to say thanks for giving wedding presents - I can remember eating the marzipan but never the cake or the impenetrable icing.
One of my teachers told me of a supposed incident where one of her friends allegedly got the same cake back a year later from a different person than she'd given it to - it was an unusual shape or something.
Of course, she might just have wanted to tell a story to get us interested in her lesson on Christmas traditions.