Archive of the original website of the distribution: [0]
This takes advantage of the UMSDOS filesystem driver [1]:
> All the Linux files will be installed in a normal FAT directory (usually c:\LINUX). This directory is then mounted by UMSDOS as the root linux directory. All the extra file attributes (long names, permissions) are stored in a separate file (--linux-.---) in the respective directory."
I remember using ZipSlack [2], a version of Slackware using UMSDOS that could fit on a Zip disk. It could also be booted from the Zip.There was also DragonLinux [3] which used a loopback file system requiring only a single file containing the image of the native Linux file system.
[0] https://web.archive.org/web/19991128183359/http://winlinux.n...
[1] https://wiki.linuxquestions.org/wiki/UMSDOS
[2] http://www.slackware.com/zipslack/
[3] https://web.archive.org/web/20010223172303/http://www.dragon...
IIRC early versions of Ubuntu allowed to be installed in C:\Ubuntu
You can still do it, albeit not officially supported: https://github.com/hakuna-m/wubiuefi