How might the Swiss currency floor be unwound?
Central banks have a lot of leeway from a balance sheet perspective to do these things. They can simply stop the practice of buying foreign currency when the CHF appreciates which would let it appreciate beyond 1.2. If it keeps appreciating they will book losses, but unless they are enormous, these typically don't make a dent in a central bank's balance sheet.

If it depreciates, they can use the foreign currency to buy CHF, or not. If they do not use it, then they book a profit, as the comments suggest. 

In many cases, the legal implication of large loses or gains in the CB's balance sheet is a transfer to or from the country's treasury. Here's a recent example from Mexico Bloomberg Article