I don't think the windows go as close to the ceiling as it appears. If the coffered ceiling detail weren't there, you'd see at least a foot from the top of the transom to the ceiling.

That's a dropped ceiling your looking at, so the header is above the drop.

A header can be located in the floor space at the band joist but that might require an engineer since building codes don't show that as standard construction.

That is not done often because it is difficult to install window treatment.

Ah! very clever design! Thanks for your responses.