Bennie,
Normalizing in knifemaking is heating the steel above the critical range (A1 to A3/Acm) and air cooling in still or agitated air. Fully austenitized, in other words, then cooled relatively rapidly, but not quenched. If there is unequal grain size the normalizing equalizes it. If there is strain or different crystal structures, normalizing gets rid of the strain and makes all the crystals the same type. People who forge blades often normalize two or three times. The forging process, especially if forge welding damascus was part of the blade making, tends to cause large and unequal sized grain. Normalizing in this instance, 1x, makes the grain all of the same size, 2x, keeps grain equal sized but also makes them smaller, 3x, still equal but smaller yet. Small grain size in knife steel makes it tougher.
In your instance, normalizing after stock removal and before HT-ing isn't specifically necessary in that stock removal of tool steel doesn't change grain size. If machining was done in stock removal (wheel or belt grinding, milling, etc.), there will be some amount of strain in the steel. It can be removed with either normalizing or stress relieving. Stress relieving would be 1200F-1250F for an hour for O1 and a lot of similar knife steels.
So you know, temps above critical range can be high enough to cause grain growth. With your O1, the upper quench temp. of 1500F is a normalizing temp that will not grow grain size.
Mike