Those are interesting and important points you've both made about dynamics, Jasen and Frederico. I wonder if, however, the discussion might be somewhat at cross-purposes unless we clarify which aspects of dynamics are being considered here.
There are of course two principal aspects to dynamics - volume and timbre. But in the realm of virtual instruments we have become accustomed to the "expression" parameter being for volume only, whilst velocity or the "velocity XF" parameter takes care of those timbral changes which can depend on the volume aspect of "expression markings" in a score.
While listening to this rendition and in praising Frederico's handling of dynamics, I confess I was focussed mainly on volume dynamics. I'll also confess I enjoy what top pro mix engineers and mastering engineers typically do to the volume-dynamics of music, and in this regard I'm certainly no "authenticist". Frederico's mix fits immediately and very nicely into my accustomed enjoyment of well mixed and mastered productions.
On the other hand I can understand your concern about too few "velocity layers at play in the piece", Jasen. SySpro's Legato and Long patches have only 2 built-in velocity layers. And whilst the PP and Flautando patches can extend the total range of velocity-dependent timbres, I have yet to learn the factory presets and how best to harness and control the full range of velocity layers in various different musical contexts. (Also, I thought I caught a hint of synthetic augmentation of timbre in Vel-XF fading of the normal Long and Legato patches, but I could be mistaken; I must do some tests to find out). Apparently all this is in keeping with VSL's latest approach to constructing libraries.
I don't harbour any preconceptions about how baroque music should be rendered today (and anyway I'm in no way qualified to do so); I simply let musicians educate my ear with their various interpretations. As to whether or not Frederico's rendition could use a little more variety in timbral dynamics, I'm not at all sure.
Comparisons could indeed be made. For example there's a very fine rendition of Vivaldi's Autumn by Carles Piles in VSL's music showcase, and currently my fav recorded performance of the Four Seasons is by Alexandra Conunova with the Orchestre International de Genève (which might perhaps elicit some eye-rolling by Frederico and comments about how very not-Italian it sounds, lol - aah Europe, my beloved family), here on YT: