From my reading of that piece, Win9x had its own kernel that was a descendent of DOS; it was not just an application running atop DOS like Win 3x. Consequently it lacked proper memory isolation and security features compared to NT but it did at least bring preemptive multitasking.

Still longing for the source leak or dump like Apple did with LisaOS so we can have the theory confirmed, then have a play with it ourselves.