We didn't quite understand the rules (or didn't want to). My attitude back then was to get through the rules as quickly as possible to get to the game. I was the impatient type who tossed away the instructions if I thought I already "knew" what to do. We were pretty advanced for our ages (we thought) but still, it led to us creating some interesting little "house rules." Some of them were silly or contradictory and we didn't necessarily have them all at the same time. The mechanics of traps and magic were kind of the last things we really learned about.
I'll try to remember as many as I can:
1) Mind Points. We didn't understand really how these worked. When it said "rolls 1 red die for each of his mind points, if a six is rolled the spell is broken," our odd interpretation of this was that you had to roll the number of your mind points on a single roll OR roll six and you beat the spell. Okay, so we made it easier (Barbarian would roll a 2 or 6 to get out of it). But then we got more confused and thought maybe it really meant roll your mind points OR MORE. So the Barbarian could roll 2-6. This led to a hasty rationalization that maybe the Wizard (now being most susceptible to magic) was the type who was most impacted because he "knew" how deadly the spells were, while the oblivious, primitive minded barbarian just couldn't be charmed so easily (he "didn't believe"). So the opposite of what was intended! Finally we came back to the game later and realized, oh, just read it word for word and it makes much more sense.

2) Movement. We hated not using our full movement. So we invented the bunny hop. This came from playing a lot of super mario bros (didn't own an NES back then but rented one from time to time or played at friends' houses). If you were a hero and moved to a square that another hero was occupying and it was your last square of movement, you "bounced" off his head to the next free square. So if there was a row of heroes in a corridor that last one in line could bounce off three ally heads to the front of the line! And if he changed his mind he could bounce all the way back too, I think. Also we made sound effects to indicate we were utilizing the trick "bump-uh"!

3) Blacksmith. As a hero I hated spending too much gold. I wanted to get all the best stuff right away, but I saw that Plate Mail and Chain Mail were expensive. So I rationalized that I could just buy a bunch of Helmets and save some gold, then "take them to the blacksmith shop" and have them hammered into a suit of armor and get all the benefits (and none of the downsides) of the other gear. So no shield restrictions, and no movement restrictions. Little did I understand (or care to try) that the blacksmith would have charged me for the labor and so I would have probably spent the same amount (or more), plus the restrictions would come about anyway. At least we didn't try to "cheat' with regard to carrying capacity ("well you can stow the shield on your back, the sword at your hip, the rest of the stuff in your backpack, and a weapon in each hand..." etc).
4) Crossbow. Yes, we know that nowadays people will be quick to point to the fact that Avalon Hill reps have "answered" this question via Twitter that they intend the four close diagonal squares can be hit by this weapon (giving it half the strength of the longsword already, plus the ranged ability), rather than explicitly banning the eight squares surrounding a hero. We took that to be how the weapon worked. Similar to thinking that Zargon was the person depicted on the GM screen, this I think was a common "error" for players of this edition back then. I still use this rule though, even though the only edition that explicitly states it is actually the Japanese one.
5) Endless Trade. We knew you could move adjacent to another hero and give him a potion. We forgot that it says "on his turn." So we would have two heroes move together and boom... they could just start swapping items. One guy could give literally all his gear to the other and the other could give him all of his, effectively swapping everything. We didn't really put this to good use and cheat (I've heard stories about people passing around crossbows and things), but that's what we thought. We hadn't yet gotten online (c. 2002) to print off the EQP/BQP and see that they wanted to stop this from happening when a monster was adjacent.
6) Re-selling items. I think it was my best friend who suggested this. How he knew it, I don't know, because I don't think we got to things like the web until a year or two later and this wasn't explicitly defined in the rules until EQP/BQP (which we never owned, but we knew they existed from the fliers in KK/ROTWL). I wonder if this was just a popular house rule, carried over from video games. I was familiar with RPGs (like Phantasy Star II on genesis) that let you sell stuff back but not get the full price in return. I imagine then a lot of kids made this "house rule" until they knew it was official. It made sense.
7) Combinations. Here again a lot of people struggle with this one today or make up new rules. I thought you could "stow" the shield and not use it, same with the Battle Axe and Staff, and get the bonuses or get past the restrictions. We didn't worry about whether it "took an action" to switch or something, you just could but we never exploited it to its fullest extent trying to cheat (the "hammer the helmets into armor" was probably me trying to cheat, the rest of the stuff I think were honest mistakes or flights of fancy because we were too bored to bother scrutinizing the rules, whatever made sense to us at the time and get on with the game).
8) KK sucks!? Kellar's Keep had so many cheap ways to screw over the heroes I thought. As a kid I was not such a gracious loser as I am today (hey!). The rolling boulder was interpreted to mean that it ran over everyone, hit the wall and then BOUNCED BACK. The idea that it was intended to kill heroes and force them to revive with healing spells didn't really sink in. I thought the game was broken. I almost quit playing at this point (but my love of the game got me over it). And yes, we played KK AFTER ROTWL (which I still today consider the superior entry). I prided myself that I was able to carry three heroes to the finish line through these two expansions (early on many heroes died, in fact we had a few TPKs on The Trial, of course).
9) Debates over Command. Early on we assumed "Command" meant Zargon had complete control over the hero. He could do anything... use up potions, throw gear away, use spells in crazy ways (we didn't quite get to the "trap yourself inside solid rock forever" thing but it was on the menu in theory). As a hero I haggled it down to "can attack other heroes" (including the use of combat spells). We still kept it to other hero attributes (he can fall into traps and still rolls white shields for defense). Looking back I suppose we really nerfed the spell but today I have kind of the same attitude even when it's my turn as Zargon!
10) Finding traps. When a trap was searched for and found, we put other stuff on the squares (spare dice, usually). And Zargon didn't move them.

11) Treasure Deck. If you're reading the Instruction Booklet today you'll see that in one place they make it sound like you shuffle the treasure deck once per quest. In other place it clearly says you shuffle before every search. We stopped at the first instruction and didn't read the second one closely. So to this day that's how I play, shuffle before the quest and then don't shuffle again until the next one. We also had the hero hang onto the good cards he found and not discard them until they were used. The bad cards went to the bottom of the deck but there was no reshuffle there either (some say you should re-shuffle when bad cards are returned only).
12) Toss me the Potion! Yes, the first "uncommon feat" (we didn't use that name) actually predated our second re-discovery of the game in the 2010s (where it became the "heroic feat," before its finally solidification in the streaming days of the pandemic). A hero was on the other end of a corridor from his fellow. The one had a potion the other needed. So the idea is the one character will "throw" it to the other. If you roll a skull, it's a fumble and the potion breaks. Otherwise you get it! I think we tried this maybe twice and once was a success and the other broke but my memory is vague on that one.
13) Secret Doors. When you find the secret door, we put down the tile. When you walk up to "open" it, we replaced the tile with the old door piece. Yes, that's actually wrong, but there's only very few quests ("The Maze" being a good example, which we didn't know existed at the time) where you will "run out of doors" this way.
14) Castle of Mystery. We didn't play this the way many others did. You moved up to the doorway, then you rolled again (I think that's how we did it) as if it was a teleport pad, and the coordinates sent you where you were going. It wasn't until recently I was thinking you move out into the hallway first (I'd have to read it again even as I'm thinking of this.. it was the one off gimmick and it was a long time ago!).
15) Courage. Even today I've homebrewed this back into the game but this was one of those early instances where as a hero I didn't want Zargon to just have his monsters run away to dowse the spell, so we had it so that after clearing out all the monsters if you have your movement left you could still RUN to the next area where you could see monsters and consider the spell still in effect.
16) Line of Sight. Here's one where we just didn't take the drawing in the instructions booklet literally enough. Literally it shows arrows "off axis." We didn't think about drawing straight lines from the center of the figure or the square or whatever. Instead we just did it by square like a Queen attacking in Chess. So the literal diagonal squares from your character is what you could hit with the weapon. I think we didn't really think much about "line of sight" with spells until we used Genie for the first time. I think when it was advantageous to just hit someone who was on the board with a spell we did, though we later started thinking about it in turns of chess squares.
17) Rust spell. When we finally came across this at first we ignored the "helmet or sword" thing. We just figured anything with metal in it (which was everything but the staff) would be damaged by it (this was close to how Rust worked in Wizards of Morcar, but we didn't know that pack existed at this time).
18) Disarming. I think we played an entire game thinking that each hero had the inherent ability to disarm a trap, not just the dwarf. I think I didn't read the toolkit description carefully enough to see it was a 50% chance. So what were we thinking? That you had to roll a white shield to disarm a trap WITHOUT a toolkit as the Wizard/Barbarian/Elf?
19) Pass Through Rock. I think we probably did the whole "but what if the furniture is made of rock" trick to try to get more use out of this spell. But we interpreted it to mean the white walls and also solid blocks/rubble could be passed through. I don't think we ever got to the point of arguing whether the Gargoyle was "made of stone" (some monsters in the quest books are described as being made of stone or whatever).
20) Gamble for more gold! Yes, this was a developed house rule for in between quests, but I don't remember actually ever using it myself (my siblings might have). Good for when you were so close to affording the thing you wanted and needed an excuse to try to get more. Basically there was the easy bet and the hard bet (if you were low on stuff you could use equipment as collateral).
21) Sleep spell. The one who has fallen asleep has their miniature tipped over on its side to show he's asleep (yes!). Everyone can just walk through him and search the room like he's not even there. I still play it this way.
22) Zargon's attitude. We didn't really give away what our secret was, but back then I took it that Zargon had to follow the game rules (no cheating on his part) and his goal really was to kill the heroes and win. So we didn't have any of this "adjust the difficulty on the fly" attitude that is now more of a GM option or the idea that Zargon really is pulling his punches and letting the heroes struggle on but is just there to ensure the quest goes on. Yes, we did want the quest to go on but we had no problem replaying a quest (and remembering to remix it using the blank map.
NEW! 23) Treasure Chests. After a little while we came up with this rationalization (which doesn't fully explain the clear 1990 error in Lair of the Orc Warlord, compare to the earlier EU edition of this quest for what was intended... the error was carried over into the remake even!)... when you "search for treasure" you discover what's inside the Chest(s), but have to walk up adjacent to the furniture piece to "pick it up" (the act of picking something up not using up an action of course). This doesn't quite make sense because the way traps work is the first person who SEARCHES for treasure (without first disarming the trap) triggers it. Searching for traps would locate the trap squares (including whether furniture itself was suspicious). But this half baked idea lingered on for awhile and it turns out there are people online who played it that way.
In 2002 discovering the Combat Cards (probably the first customs I ever printed out, from Phoenix's page, and I think it was still Dewayne Agin's Inn back then too), got our imagination going, and we started throwing in interesting little things here and there, my brother especially. A decade and a half later and we really go at it with the imagination, though I'm more of the "it should be on a card/miniature" more than my brother. Still, I have learned to let loose a little more and it's a lot of fun.
No, we never thought to wield two weapons at once (with a bonus) or put the magical armor/weapons on the Wizard...
I don't recall what else, if we ever let you roll again for doubles (like Monopoly), but that's the sort of thing that usually got us going, some other game had some gimmick and we wondered what it would be like to do it in this one. As long as you can convince Zargon...!
In 2002 I kind of started over and tried to really read the instructions and learn how to play "the way it was intended." In 2016/2017 I was more like I'll use that as a base and then add my house rules on top. I wanted to keep the nostalgia for the game I'd developed but also have a little more fun with it, and old habits die hard so some of those house rules endure, even though I have played now with other people who have different house rules and just learned to accept that they played the game differently than I!
Any interesting or fun ones you want to share?
* Yes, there were D&D video games, but I didn't understand the whole context of "forgotten realms" and "dragon lance" etc. D&D was like Robotech, a mysterious game "older kids" played that we didn't know much about.