Microsoft released the NT 4 version of it under the MIT license: https://github.com/microsoft/winfile

I'd rather suspect the Windows API behind for this behavior, rather than the file manager itself. Apparently there might be leaked Windows 3.1 source code (but not all of it): https://www.betaarchive.com/forum/viewtopic.php?t=41781 (only comments here, didn't check further to see if/where this can be downloaded), but not sure if the relevant source is visible there. Windows 3.1 doesn't seem to use the same conversion as for Alt+XXX to read file names (which are stored in the OEM charset on the disk, e.g. code page 437), as typing Alt+255 enters a normal space (not event a non-breaking one).