Though Windows 95 was arguably similar running atop “DOS 7” it actually imposes its own 32-bit environment with its own “protected mode” drivers once booted. Dropping to DOS reverted to “real mode”.
EDIT it’s coming back to me. Windows 3.1 did have a a subsystem for running 32 bit apps called Win32 I think that’s what you mean. This was very much in the application space though.
It still used cooperative multitasking and Win 95 introduced preemptive.
”Win32s lacked a number of Windows NT functions, including multi-threading, asynchronous I/O, newer serial port functions and many GDI extensions. This generally limited it to "Win32s applications" which were specifically designed for the Win32s platform,[4] although some standard Win32 programs would work correctly”
Looking back, Microsoft were clearly in an incredibly complicated transitioning phase, with very little margin for error (no patching over the Internet!)
So I guess there would have been a time in 1994 where many people were forced to retire their 286es. Though Mosaic was quickly replaced by Netscape Navigator in late 1994 which worked on Win16.
And then Windows 95 came along, and it really needed a 486 with 4MB of ram, ideally 8MB.