Another piece in the puzzle...
I just discovered that this particular GPF is 100% resolved by reducing the screen resolution.
1680x1050 is ok
Edit: 1716x979 is ok too (host is 1920 x 1080, VM Guest in windowed mode with library panel open on the left)
1916x979 or higher = GPF
My VM doesn't give me any option to select values in between those two so I am not sure more precisely where the limit it. I guess this is some 16 bit related hard limit of the embed editor!