I would say that the wheat proteins end up suffering the same fate as the majority of other proteins we eat. Being plant proteins, they are less easy to digest, so I would expect larger polypeptides to remain after the digestion process--but they would be excreted in the feces or consumed by gut bacteria, just like everything else we eat.
The overconsumption of carbohydrates is a problem. Just plain eating an unbalanced diet is a problem. Beyond that, there are no magic diets that have all the magical ingredients. You get enough of the micro- and macro-nutrients, or you don't. That is basically the essence of what decades of nutritional research have revealed.
Well, this diet seems to work for me and many others. Given the variety in our own genome, results may vary, of course.