I still would expect it to be something running on top of Windows, not a part of the NT kernel. Subsystem is a specific term for a core concept of the NT kerne

I still would expect it to be something running on top of Windows, not a part of the NT kernel. Subsystem is a specific term for a core concept of the NT kernel here, so no it wouldn't make sense to call it LSW. MS has some confusing naming, this isn't one of them.