Turns out Inline Entity Form settings are in Edit tab, not Field settings tab. Once I realized this, it was easy to find Allow users to add existing nodes checkbox. Once it's checked, there are two buttons on field's list, one for creating new, and second for adding existing referenced nodes.

Inline Entity Form settings are in the Edit tab, not the Field settings one. Once I realized this, it was easy to find Allow users to add existing nodes checkbox. Once it's checked, there are two buttons on field's list: a button for creating a new reference, and one for referring the existing nodes.