...Does this mean that any discs "made" with this EH69 can only be played on Region 2 DVD players (as it seems to say so directly)...
To answer this directly, the answer is NO! The disks you make are region free. As it came from Panasonic, it would only PLAY region 2 encoded disks, OR region 0 (zero) encoded disks, or region free disks. Your EH69
has in all probably been modified to ignore region coding, and therefore the region is irrelevant. As jjeff said, the modification is not reflected in the manuals or packaging, so ignore them.
If you are concerned, try playing back a region 1 commercial DVD and see if it plays properly. It should, thus proving the EH69
to be region free.
Be a little cautious when buying commercial disks from region 2 as most of them are PAL, not NTSC, and the EH69
does not convert the video to NTSC, even if you have NTSC selected as the television system. If your television can display PAL like mine can, you are fine, but if not, you will need a PAL to NTSC converter, and that is a whole "other" big problem/issue.