I'm sure bound edges have been around at least 200 years, if not longer. When shellac was used to stiffen hats, it left a whitish edge where the felt was trimmed off the brim, and so binding had to be used to hide it. I don't know when the first soft hats received them, but soft hats became popular around the mid-nineteenth century, so even more so after the turn of the century. Bound edges were a common edge treatment on those hats, so you could say they grew up with the fedora.
Not sure about your binding width question, but the wider binding seems to be used more on the wider brims, so was probably more prevalent from the late-1930s up to the early-1950s, when wider brims were also popular.
Binding on the edge of hats has been around for a long time. It is pleasing to the eye, and adds some degree of "snap" to the brim, holding the shape better than a "raw edge".
You also notice that it "dresses up" a hat, and affords the wearer a bit more class. The ribbon binding on the edge of the hat can also alter it's overall appearance.
A wide bound edge ribbon or a narrow bounde edge ribbon can trick the eye into how it perceives the width of the brim. A different color, ie. contrasting color, also affects the overall look of the hat. Putting on a dark edge biding on a light color hat, or a light binding on a dark colored hat, all change the look of the felt, .....going up or down respectively in the color of the felt.
A bound edge does dress up the hat, and can make a statement. I have been lucky to have visited several hatters, and it is remarkable how holding up different shades of ribbon color, on the edge or the crown, drastically changes the look of the hat. Not unlike the color of a tie mated with shirt and suit color. It is all a matter of taste, and appearance.
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