I think there are some details that need to be put together. Here are some key posts from this thread:
You're right about this last comment (if m≠n); but you also missed something in the definition of the identity matrix. The identity matrix I
m must work not only with all m×n matrixes A for
one fixed n, but for
any n, and on
both sides. Yes, Halls slightly overstated things, ignoring n; but it is nevertheless true that when m=n, it will commute.
Therefore, if I
m is an m×m identity matrix, and I'
m is also an m×m identity matrix, then (as Jomo said)
Im = ImI'm = I'm
because I
m is an m×m matrix, and when multiplied on the right by I'
m is left unchanged (the first "="), and likewise I'
m is an m×m matrix, and when multiplied on the left by I
m is left unchanged (the second "="). So they must be equal.
Now, if you had an I'
m that was an identity only for m×n with one particular n, and only on one side, all bets might be off. But it wouldn't be an identity matrix.