A reader has done exactly that and reports pretty confidently that the CD-ROM subsystem firmware is not Windows, and appears to be mostly hand-written assembly

A reader has done exactly that and reports pretty confidently that the CD-ROM subsystem firmware is not Windows, and appears to be mostly hand-written assembly and probably by Hitachi. Unsurprising considering their prominent role in the CD-ROM industry. It is true that the later Sega Dreamcast could run Windows CE, although the Saturn, as far as I can tell, never could. Windows CE had barely been started when the Saturn came out, so it doesn't seem realistic that there had been a plan in the Saturn era to put CE on it. If I had to speculate (and I do) I think that perhaps the Sega-Microsoft partnership for the Saturn didn't work out, perhaps due to the failure of WinPad or Pegasus, but did start the relationship that lead to CE support on the Dreamcast.