Breaker Panel Blues

The funny thing about seeing three circuits with a single Neutral returning from the house and 2 ground wires is that the house has zero grounded outlets or lights.  So do those ground wires go to some magic land where magic lamps need magic grounds?
I was puzzled by the single red wire going to the first breaker. It's 110v so why is it red? I figured they ran out of black wire, but that's not the reason and the real reason is staring me in the face. What happened is that the electrician who moved the panel and upgraded to 100amps replaced the wires 'in kind' and the original wiring shared the three neutrals. Yes, all the neutrals (1 for each of the 3 branch circuits) go to one wire nut and then a single white neutral returns to the panel. That seems shady but it was actually approved of long ago. Why a modern day electrician is allowed to replicate this method is a mystery.



I've figured out some of the mysteries about this Main Load Center, but there must be others. Please advise.

The first puzzle was the red wire to a 110v branch circuit. Did they run out of Black? No, all 3 of the neutrals are in a wire nut in an exterior junction box. Only one neutral returns to the panel. The red wire is a 'warning' that there are shared neutrals. But I thought one could share neutrals only on opposite breakers due to split phase, but by sharing all 3 neutrals #1,#3,#5, doesn't that mean breaker #1 neutral could indeed be live because it's linked to #3 even though I turn off breaker #1 since they are both on the same phase? 

I thought a modern electrician getting a permit to do a service upgrade to 100 amps would not be allowed by the inspector to omit AFCI breakers simply because the original breakers were not AFCI, but I'm wrong. I talked to the inspector and AFCI breakers were not required even though the house has no grounded equipment. Why? All the two prong outlets will need AFCI protection so what is the point of installing regular breakers in a house with no equipment ground? Those ground wires in the panel stop at an exterior junction box around the corner where all the cloth covered wires come together. The upgrade went no further than the wall.

What is with the bare ground wire directly to the neutral bar? That bare wire goes directly to an exposed water spigot in the lawn and then to the natural gas manifold. Doesn't that bare wire belong on the ground bus? 


I'm curious if anything is 'good' about this load center work?

The house is part adobe late '30s build. All plaster walls...2 feet thick in some places. My plan is to rewire the entire house by taking the ceilings down since it appears all the branch junctions were made in hidden boxes in the ceiling. 

But immediately I want to add the 2 neutrals so the branch circuits are independent. There is space in the EMT but they used THWN 12 solid and I can only find THHN locally. It's not exposed wire but the conduit is exposed before it enters the house. (Gives me an idea that the new entry point should be right behind the box and not through conduit around the corner.) I think 25 ft of THHN wire instead of THWN is the least of the problems here but others might disagree.