Yeah, it's actually a hack that is well explained in the book "The Future was Here". It's not real desktops since it only works on the vertical axis. But even though, it was massively impressive compared to what other computers could do at the time.
For instance, if you have an interlaced mode showing under a non-interlaced mode, then the entire screen displays at ~480i (to use modern terms) with the non-interlaced portion doubling its scanlines. But if the interlaced screen gets covered up, then it snaps to ~240p non-scandoubled.
The biggest modern problem with this is that displays turn themselves off to resync on mode changes, which always annoyed me greatly.