What happens to AVR registers during multi-cycle instructions?
Here is my interpretation:

In order for a 8-bit uC to do 16-bit maths, it has to first calculate the lowest significant bits then moves to the highest significant bits, so first cycle adds 8-bits with a carry then adds that carry to the higher 8-bits.

In abstract sense 8-bit can't do 16-bit calculation in a single instruction as results affect each other.