OK, I was bored and "fixed" it. Now it runs fine on any [modern] Windows version.
It's still broken though. We can even use the executable from Vampire Blaze 3, which is a more recent version of the same crappy engine but the game still doesn't function as expected.
Download it here:
Vampire Blaze ver. AEDIT: The vanilla game runs like garbage probably because Windows 8 and 10 can't handle DirectX 7 properly.
So I found
Wine3D. I included the dlls from version 3.1, which is the latest build that works fine with the game.
It actually makes the game run at full speed and without visual glitches. It lags at some parts for whatever reason but most of the time it runs very smoothly.