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See section 2.8 of the Xt specification.

It eventually does get destroyed, just not immediately.  The
Intrinsics destroy a widget in a two-phase process.  First it and all
of its children have a flag set that indicate it is being destroyed.
It is then put on a list of widgets to be destroyed.  This way any
pending X events or further references to that widget can be cleaned
up before the memory is actually freed.  The second phase is then
performed after all callbacks, event handlers, and actions have
completed, before checking for the next X event.  At this point the
list is traversed and each widget's memory is actually free()'d, among
other things.

As some further caveats/trivia, the widgets may be destroyed if the
Intrinsics determine that they have no further references to the
widgets on the list.  If so, then the phase 2 destruction occurs
immediately.  Also, if nested event loops are used, widgets placed on
the destroy list before entering the inner event loop are not
destroyed until returning to the outer event loop.