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@bikeguy
Hi, this is my first post to the forum. I am an old time bicycle mechanic living in sunny California. I have rebuilt several of the Sachs hubs on which the Velosteel hub is based, and I just got a Velosteel hub from Bikefix.
This design does indeed have less drag than the shimano design. The more precise the parts are, the easier the clutch works, the less drag is required to engage the drive and the brake. When you rebuild this hub, it is possible to get too much grease or too heavy grease and make the hub slow to engage either drive or brake, so go easy, and use thinner grease. If one were brave, you could adjust the drag and use oil, but be sure to have a second braking system to back it up. Like I said, only if you are brave.
Here in the States, there are a lot of old Schwinns that have the Sachs built Schwinn Approved hub. These are very nice, and are finished off with a bit more chrome. I use one on my chrome Schwinn Paramount track bike, and it looks right at home.