I've thought about this for many years. It's possible to have a radiused fingerboard w. matching frets. But as you say, how to have correct action for both modes? IMO you need to raise and lower the nut and bridge saddles as well as the frets, but then it goes out of tune, so that's no good.
An alternate approach would be to raise and lower the fingerboard instead of the frets, but then to have a smooth surface in fretless mode the frets would have to be flat with no crown, also no good.
So really, to do it right, you have to both raise and lower the fingerboard, AND rotate the frets- a mechanical nightmare.
Still, my hat's off to the maker for having the determination to get as far as he did.