John
My 2 cents is that the originator of that "californio" strain (whoever it was, i.e. Odetta, etc) just latched onto the variation in the one chorus because they liked it and it was more referentially "American." It helps to reconcile what they would have considered to be the set, "traditional" lyric that refers to going to Frisco Bay, digging gold, etc.

How did the "Californio" line get there in the first place? Well, the singer was recorded solo, presumably, so he was not bound to the corrective force of a chorus. "Santiana" can be mapped right on top of "Sacramento," so the influence may have come from that song. (Also cf. "plenty of gold, so I've been told").

The two songs got "crossed" by Sailor Dad, then the American revival singers edited it to conform to their American frame of reference.