Confusion regarding floating point representation

I've been reading an article by Dr William T. Verts titled An 8-Bit Floating Point Representation where the author defines, as the title suggests, an 8-bit floating point representation with one bit for sign, three bits for exponent and the remaining four bits for the mantissa.

Question 1

Now, in the article, he writes:

The range of legal exponents (those representing neither denormalized nor infinite numbers) is then between 2^{-2} and 2^{+3}.

I'm confused as to what he means by legal in this context. And, why can't 2^{-3} can't be a 'legal' value? As when 2^{-3} offset by 3, gives 0 which is 000 in the exponent field.

Question 2

Next, he lists all possible values of numbers representable in this system. I'm attaching the screenshot of the first few denormalized numbers below.

I understand that we cannot represent small numbers in the normalized form, forcing us to detour from the norm and use 0 before the decimal point rather than the usual 1, which gives us what we call a denormalized form.

But, why are we using -2 in the exponent of 2(rather than -3)?

According to the rules of excess-3, the exponent field should have -2+3=1 which is 001 in the exponent field, but it has 000 in the exponent field instead(it does have 001 in the normalized numbers). But, if we use 2^{-3}, the exponent field indeed should have 000 as -3+3=0.

A nice summary of my second question would be: Why are we not using 2^{-3} as the exponent from N=1 to N=15? The exponent field does have 000 which corresponds to -3 as the exponent.

Note: I understand that the nature of the topic itself is pretty confusing. Thus, if there is any vagueness in my question, please point it out in the comments.

But, why are we using -2 in the exponent of 2(rather than -3)?

Suppose you did that. With exponent field 000₂ for subnormal numbers (leading bit 0) and primary significand¹ field values from 0000₂ to 1111₂, you could represent the numbers 0.0000₂•2⁻³ to 0.1111₂•2⁻³. And with exponent field 001₂ for normal numbers (leading bit 1) and primary significand field values from 0000₂ to 1111₂, you could represent the numbers 1.0000₂•2⁻² to 1.1111₂•2⁻².

Where is 1.0000₂•2⁻³? The subnormals stop at 0.1111₂•2⁻³, and the normals start at 1.0000₂•2⁻². All the numbers from 1.0000₂•2⁻³ to 1.1111₂•2⁻³ were skipped.

When you are going down from the lowest subnormal, 1.0000₂•2⁻², you cannot both decrease the exponent and change the leading digit from 1 to 0.

That is why the 000₂ exponent code means the same exponent code as 001₂. It is a code for changing the leading bit to 0 but using the same exponent as the lowest normals. Which answers your first question too.

The exponent field actually encodes both the exponent and the leading bit of the significand:

Footnote

¹ “Significand” is the preferred term for the fraction part of a floating-point number. “Mantissa” is an old term for the fraction part of a logarithm. Mantissas are logarithmic; adding to the mantissa multiplies the number. Significands are linear; adding to the significand adds to the number (as scaled by the exponent).