I looked into .lay files at one point thinking they would be something relatively simple and found that they were not. I didn't want to invest the time, so I let it go.
If you have found some resources that make the process easier, it would certainly be nice to hear about them.
I normally have Hide Desktop disabled as it makes testing easier. HideOS does not launch when I start GameEx. This is what I would expect. I wonder why it is doing so for you.
Maybe check your GameEx.ini to see if the HIDEDESKTOP parameter somehow appears twice.