That's a bit of a one sided take IMO.
Textures are lower in some places and higher in others with the current build, which doesn't yet have all the texture conversion and streaming optimisation in place (probably little to no streaming optimisation really).
In some ways they're limited by the scalability settings of the PC version, which appears to be making them use higher than PS2 setting in some areas e.g. geometry, object and traffic density, physics calculations on additional obstacles like fences not present in the PS2 version. If they could cut back down to the lower complexity that the PS2 version used (which would need a lot of work from an modeller / artist) they would free up both memory and CPU time. Enough to match the PS2 in all areas? I dunno.
Also, with KallistiOS iirc access to the optical drive is slower than for commercial games, using a lot more CPU and not using all the hardware features available to commercial games. Something to do with optical drive DMA...?
With motion blur on, fillrate will be an issue for the DC, but without it, it's probably only during certain situation like with heavy rain settings for cinematics like with the intro.
DC can't actually drop to a lower resolution like the one PS2 used for GTA3. It's 640 x 480 - Sega made the decision to base the design around high IQ and built the binning and tiling stuff into hardware for performance reasons. It took a ton of work off the CPU and meant they could rapidly sort and ID lots of polygons - faster than the later PC version of PVR2, with a fraction of the CPU overhead.
Internally the DC is always 640 x 480 24+8bit, it's one of the reasons its ouput always so good, and with the hardware flicker filter it's also why interlaced output was always so good.
I mean, it's currently handling above the PS2 in several areas. 640 x 480 RGB progressive scan is a pretty huge step up, and the object density, geometry, and collision upgrades definitely won't be free.
But at this level, are these really "versions" in any meaningful way? It's the same game. It plays the same, uses the same rules, looks and runs worse in some ways, looks and runs better in others (e.g resolution x frame rate).
It's already close enough for the argument to be well and truly over IMO. I'd say the same for a PS2 version of Shenmue that had slightly worse texture quality but a more stable frame rate, or for a PS5 game that had a slightly lower max dynamic resolution than the SXS version.