Well, keep in mind that in the sort of state the computer is in when doing CAR, you don't get to talk to storage devices; nor do you get the benefit of having some kind of ROM on the bus. I know Windows 95 is happy to run from 4MB RAM with access to a hard drive; but how much memory would W95 need for a "bootable live-CD environment" where the disk image must be resident (if compressed) in memory along with all work RAM?
(This is why I compared to the SNES: if you have to map the SNES's RAM and [every bank of] the game's ROM, then you're looking at 4–16MB depending on the game. The SNES is pretty much the newest console whose games would entirely fit, I think.)
I think that the only thing that prevents you from ignoring the memory controller and initializing the rest of x86 board while still remaining in the CAR mode is the sheer ridiculousness of doing that. As for whether you have an memory-mapped ROM available I'm not exactly sure, but the high-level model of what x86 firmware does seems to imply, that the hardware maps an part of SPI Flash at the address range where there was an ROM chip on the 8086/286/386 PCs (the actual address ranges are different).
For a benchmark test for a British computer magazine in about 1996, I hand stripped down an installation of Windows 95 so that it could fit on a mid-1990s SSD: which is to say, a PCI slot device with 16 MB of DRAM which appeared to the computer as a disk drive. So, effectively, a 16 MB SSD. Not gigabytes, megabytes.
So I can say with some authority that it is possible to have a complete running installation of Windows 95 in 16 megs of disk space; however I had to trim it pretty brutally to fit, so, for example, I think it had 2 fonts left, one of which was used for the widgets that display window-close boxes and so on.
The problem was that the object of the exercise was the benchmark how much quicker it was — but there wasn't enough space left to install any applications, and our benchmark tool used real applications. So, although I did several days work and I did get paid for it, the effort was at heart in vain. But in principle yes you could run Windows 95 entirely out of 16 MB of cache memory, and if you had say 32 MB of cache memory it would be no problem at all.
(This is why I compared to the SNES: if you have to map the SNES's RAM and [every bank of] the game's ROM, then you're looking at 4–16MB depending on the game. The SNES is pretty much the newest console whose games would entirely fit, I think.)