It was a temporary variable meant for internal testing. Also with Proton 10.0 fshack no longer exists as a complete solution. The windowing behavior is upstream. There are few remnants like the opengl change you have linked, but nothing to the extent of the Proton 9's fshack.
Thanks for taking the time to explain that, much appreciated!
Currently using the Proton 10 beta (10.0-1d) and setting this variable no longer seems to disable the fullscreen hack.
I can see the following commit went in: https://github.com/ValveSoftware/wine/commit/126ca6c42915ad871ca399bce5102bb536114e89
But it just seems ineffective, setting WINE_DISABLE_FULLSCREEN_HACK=1 behaves the same (full screen hack enabled) as without setting the variable at all.
I have not done anything else clever, like tried to enable the Wayland driver.
I am using an AMD GPU with just the default Mesa drivers on Archlinux.