The MC1350 is the control element. the circuit posted is only the feedback system
to drive the control element automatically.
While its possible to use the MC1350 in the bitx its not really a bitx anymore and
to add it to the PC board version is not a trivial task mechanically. Last items is the
MC1350has considerably more gain than the TIA or single transistor amps typical
of the bitx. We are talking 45-60db against the 17db for the TIA. That would
change the gain distribution and likely lead to instability and overload.
However there are many designs that use it and take full advantage of it.
I've used it in a few myself. I've found however its AGC has a nasty
property. As the gain goes down the device noise figure goes up
remarkably. This makes for a less crisp sounding radio. and requires
additional bandpass filtering after it for best result. The KNQ7A does that
7 crystal filter for selectivity and 1 more after the MC1350( P is for plastic case)
for wideband noise management outside the IF frequency.
The X1M AGC add is similar to dozen of functionally similar circuits and with
one inversion (an opamp) added would work just fine.