Naive question from someone who's never written this sort of compatibility layer: couldn't a VDM map handles? They are opaque values. Change the value, basically, keep a 16-bit table mapping to the host OS's 32/64-bit real handles?

Edit: the readme has something very similar:

    wine based Win16->Win32 conversion codes:
    BOOL16 WINAPI DestroyWindow16( HWND16 hwnd )
    {
        return DestroyWindow( WIN_Handle32(hwnd) );
    }

I would guess that's what the WIN_Handle32 method/macro is doing.