It also wouldn't cause any serious issues with full-screen applications
The window still receives those messages, even if it is a fullscreen borderless window.
Yes, but they don't need to worry about the cursor wandering off of the screen while its hidden. Their window covers the entire desktop/display, so there is no danger of accidentally hovering/clicking something in the background.
Or at least there shouldn't be. In all honesty, I believe there is a slight danger of it happening, even then. I remember having windows unfocus my fullscreen app while clicking inside my game, before I started locking the mouse to the center. I believe it is still possible to scroll over the edge of your window region in fullscreen - although it may only happen when the game switches to a lower resolution display. I'm not sure, as its been a while since I experienced it.
WM_SHOWWINDOW seems to indicate that it will tell you when your app becomes top-most
I don't see anything in the docs for WM_SHOWWINDOW regarding z-order, only minimizing, maximizing or restoring under specific circumstances (and a specific call to ShowWindow). Can you provide a reference?
No, you are right. I got that mixed up. It mentions that it sends messages when the "window is being uncovered" and "window is being covered" but it appears that it only sends these regarding maximized windows for some reason. That explains why it didn't work.