You have to designate the DH before the game starts and that can be any of the 9 fielding positions/DH. The player can be replaced as a fielder but remain as a hitter as he is now a DH for the replacement. It has been in place for several years in the summer and even some HS leagues recognized it. mentally you have think about it as a player on the lineup is a hitter and a fielder. If there is no DH designated, then all 9 fielders are hitting for themselves. If there is a DH designated, then the DH is batting for that fielder, which can be the same person. The re-entry rules are the same as for any starter for fielding or hitting in the ones I have seen. The SS/DH can be replaced as SS or as DH and have the ability to come back one time in either position but not both.
Ultimately, I think you will have multiple DH's and you could possibly have 9 fielders and 9 hitters. Some will be the same and some will be different. You could have 18 kids starting a single baseball game for one team. The key will be someone will say this allows more kids to play and use their talent.