On the question of how, this arrangement was imagined, proposed, and put forward by Hondurans themselves. They sought me out because they could see I had been thinking about something similar, so they asked me to help them. But they saw this as a way out of the kind of trap they had been in, especially after this traumatic episode of a coup with the previous president, Zelaya. So there is a new administration that is committed to reconciliation and asking the hard questions about how to rebuild trust.
To be clear, they have in no sense ceded sovereignty of this land to any other kind of government.