I believe that plot, was an earlier working of the script, I doubt Disney would release anything of that sort under their Disney banner, nor as part as a family franchise. Considering how endeared the MGM film is, I think it would be bad buisness. There are actually several Oz pictures in the works, when we had an Oz thread here, I made a listing of them. the closest in release is 'Dorothy of Oz' based on the book by Roger S. Baum (non-cannon).
http://dorothyofoz.com/
I agree, as much as I love MGM's film (I've got nearly every home video release of my life time XD), it's tone and appearance of Oz differs greatly to Baum's land, and can be a bit overly sugary. I've always been annoyed that out of 40 offical Oz books, plus the series set in other lands in Nonestica (pictured below) that we always get films based on original ideas, and visuals that go back to the MGM movie.
Your so very lucky!!! It's quite difficult for me to find anything by Thompson, partly because so very few places offer the Oz books, and rarely anything beyond 'Patchwork Girl'. I've been dying to read 'Royal Book of Oz', though I hear it's quite a mess , being her first book.
I love Dorothy, but Patches and Button Bright are favorites of my own