Yeah, I've seen this cheat before. I believe I've actually done it as well, but its been such a long time ago that I last played MK1 for the GB.

Apparently, they had it in mind to put all the characters in the game, but I guess they did not have enough memory available, so they had to nix certain things. This is why we don't have a lot of arenas as well. The Game Gear version featured Johnny Cage, but took out Kano, so I think it was kind of an eye for an eye deal there.

Video games do this all the time. They took out the majority of Cage's character (sprites, moves, etc.), but left his name in there. Its definitely not uncommon to see some left over pieces of removed material from a video game.

I know that for a fact. I just saw a few people on Midway Board thinking it was a fake, and I just wanted to prove it via video.

Whats the code? Could you actually play AS him?

Yes, you can play as him. It's not in the video, but I'm sure it's possible. The code is (all credit to mksecrets.com) 010785D6. Note that the code is for Gameshark.

Oh that sucks then. Do they even still make gameshark or sell them?

You don't have to have a hard copy of it. Just use an Gameboy Emulator. I suggest VisualBoy Advance. Then, find a Mortal Kombat 1 ROM for the GB (Mind you, it's difficult to find online these days), and then you have to input the code in VisualBoy Advance. Hard to explain on a computer.