How does a USB 2.0 Wall Charger negotiate current output?
there is no detection on the charging port side, and the charger should always output IDCPIDCP {0.5 - 5.0A max} on the VBUS line - is this correct?


I don't understand this completely, because the BC spec is confusing to read, but yes, dedicated chargers (DCP) short the D+ and D- together to indicate what they are.  This doesn't indicate any particular current available, though, it just says that it's a DCP.  Different chargers supply different amounts of current.

The charger has no brain in it; it just supplies 5 V until the current draw is too great, and then its voltage starts to droop:



It's the "portable device" (PD) which has to be smart about limiting its own current draw from the DCP to stay within the dark region of the plot.  So it can try to draw up to 1.5 A, but if the charger voltage drops below 2 V at 0.5 A, then you can't draw any more than 0.5 A from it.


  For a dedicated charger or USB
  charger, the current limit is determined by loading the
  adapter. When the adapter’s output voltage starts to
  collapse, it is an indication that the current limit of the
  device is reached. - MAX8895 datasheet