It is not surprising that Fiat did a twin-cam 1600 Tipo, this engine was very sucessful in the eighties. It went into the SuperMirafiori, Strada/Ritmo, Regata, and the Lancia Delta GT/GTie and the Prisma. In no way is it a "bad" engine, but for most markets they probably offered the 1.8 twin cam Tipo, and remember the original 1.6 SOHC with the Weber carb was much quicker than the later ones with SPI and cat.
Respect is due to all Fiat (Lampredi) twin-cam 8V engines! Especially in the Tipo!