I have a large collection of old patterns and searched through them to get ideas, finding two patterns using the stitch, one from Canada in the 1950s and one from England in the 1980s. But neither of them did any shaping around the arms, instead just knitting two rectangles for front and back; presumably this is because of the difficulty of creating shaping in this 18 stitch pattern.
So the challenge was to create a shaped garment in this stitch. I had learned that a garter stitch edge works well on this type of pattern, as it shapes naturally so the bottom and the necklines were easy. After a bit of thought and experimentation I figured out how I could do the armhole shaping, though the armholes are rather more square than normal armholes. Then the only difficult bit was working out the stitch divisions for front and back for all sizes. I've retained an element of the cap sleeves of the older patterns as the "straps" of the top are quite wide due to the requirements of the pattern. On me the armholes just fall slightly off my shoulders, but maybe less so on someone with wider shoulders.
I enjoyed the challenge of this project, and managed to use up quite a bit of the vintage cotton yarn I bought a few weeks ago. So now I'm working on using up more of the yarn and am designing a summer bag (purse in American). I hope to get it done in a week or so, watch this space!