But the result is 1, whether you calculate it as 16-by-16 unsigned multiplication (you get 0xFFFE0001 truncated down to 1), or 32-by-32 signed (you multiply -1 by -1 and get 1, with no overflow).
reply> 32-by-32 signed (you multiply -1 by -1 and get 1, with no overflow)
replyWrong. You mentally casted each operand to int16_t before subsequently casting to int32_t. The first step is unjustified.
The correct calculation according to the C standard is: (int32_t)0xFFFF * (int32_t)0xFFFF, which definitely overflows.