It did and it was a very impressive tech demo....but it's not representative of a usable general purpose OS. Chrome or Firefox alone comes in at > 200MB. So there is no way you'd get a browser that would work with the modern web to fit on the 1.4MB floppy. And that's without factoring in fonts, drivers, a kernel and other miscellaneous user land.
The QNX demo was a bit like this N64 demo. Great for showing off what can be done but not a recommendation for what is practical.
> You could run Linux under a TTY for i386 with 2MB with some swap about 24 years ago.
That's still double the memory specification and yet Linux back then lacked so much. For example Linux 24 years ago didn't have a package manager (aside from Debian 1, which had just launched and even then dpkg was very new and not entirely reliable). Most people back then still compiled stuff from source. Drivers were another pain point, installing new drivers meant recompiling the kernel. Linux 1.x had so many rough edges and lacked a great deal of code around some of the basic stuff one expects from a modern OS. There's a reason Linux has bloated over time and it's not down to lazy developers ;)
Let's also not forget that Linux Standard Base (LSB), which is the standard distro's follow if they want Linux and, to a larger extent POSIX, compatibility wasn't formed until 2001.
Linux now is a completely different animal to 90's Linux. I ran Linux back in the 90s and honestly, BeOS was a much better POSIX-compatible general purpose OS. Even Windows 2000 was a better general purpose OS. I don't think it was until 2002 that I finally made Linux my primary OS (but that's a whole other tangent).
I mean we could have this argument about how dozens of ancient / partially POSIX-complient / unstable kernels have had low footprints. But that's not really a credible argument if you can't actually use them in any practical capacity.