ReactOS is a free open source operating system aiming for binary compatibility with Windows NT 5. Would it be desirable or feasible to fork it to resemble Windows 98 in speed, performance and compatibility more closely? This could be considered instead of trying to build an open-source Windows 98 clone from the ground up.

I consider ReactOS pretty fast, maybe faster then Windows 98. That is mostly because it isn't bloated with the code from the older builds like 98 is.

I would imagine it already has better stability, performance, and hardware compatibility than 9x. Software compatibility is the only issue, and that is probably the #1 thing they work on already.
Only problem is, it is a difficult task to achieve, so inevitably it will take them long to get there. It is already on their todo list, though, no need for a special mention or fork.

Well, a fork is not so simple to achieve, but you could be a member of the Open sourcing 9x (aka GNUWin) project, instead.