I own the 10 years of Oddworld art book. Looking closely at Slig design pictures, I notice evident joints, such as a 'foot' and 'knees'. My best guess is that, since they are said to have come from a swampy environment, they originally lived in a relatively open environemnt. Then their surroundings changed, and so walking through the turgid swamp was very difficult, and they eventually turned to dragging themselves along on their arms. So, their legs eventually shrunk, and merged together.
I was trying to find the picture on TOGG, but TOGG appears not to be working. All the links there just stay at the homepage. And we don't have a scanner right now as my sister broke it. Plus I'd be paranoid of lawsuits etc. anyway, even if I did have one.
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