I have a application running on an ADuC702x. The startup code puts the processor in System mode (CPSR Mode bits = 0b11111), which is a privileged mode AFAIK. When I check the contents of the CPSR the thumb state flag (T) is 1 indicating Thumb mode. However, page 36 of ADuC702x Rev C data sheet (below) for the device says the processor always runs in ARM mode when in a privileged mode.
ARM Architecture Reference Manual (Rev I) :