"I am still somewhat surprised that Windows doesn't have a Docker-esque sandboxing system to solve this problem (I mean, it has Docker, but it's based on a full VM). I suppose in the third-party realm at the very least you have Sandboxie, but meh..."
Starting with Office 2016 (maybe 2013) App-V from MS does precisely what you describe and it doesn't require any sort of classic virtualization component to be accessibly by the OS or hardware.
Starting with Office 2016 (maybe 2013) App-V from MS does precisely what you describe and it doesn't require any sort of classic virtualization component to be accessibly by the OS or hardware.
See: https://en.wikipedia.org/wiki/Microsoft_App-V
The tech is there. Usage is a different story.