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I'm using the License Generator functions in my application. When I protect my license generator, it still requires the WinLicenseSDK.dll file!
When you protect your application, WinLicense removes the linking with the WinLicenseSDK.dll, so, WinLicense will return the real values for the SDK functions.
This is the case for all WinLicense SDK functions except the License generator function. The code to generate a license, it's implemented inside the WinLicenseSDK.dll itself, so, for the License Generator functions, the linking with the WinLicenseSDK.dll is not removed.
Summing up, your license generator can be protected, but it will require the WinLicenseSDK.dll to be able to generate licenses for your application. Anyway, notice that it's not common (or necessary) to protect your License Generator as normally you are the only one that has access to it.