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It originally had a range of 4 MiB, and they extended it to 16 MiB in a later ISA revision. The bits with the XORs were originally constant-1 and they wanted to keep backward compatibility, so bits J1 and J2 are interpreted as "if this bit is clear, toggle this position in the leading sign bits".
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There is very cool history as to why. In armv5 the BL was two separate instructions. You could take an interrupt in between. And it was documented what each did. Veeery cool. Then they wanted more range. And now that they redefined the two halves as one instruction that could not be in halves, they also redefined a few bits that were always 1 before, to allow the second half of the instruction to be recognized right without a “previous instruction was first half of BL” flag somewhere that would need to be context switched and all that.
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