performance expectation for live tool lathe?

It depends. Many modern lathes were around 5k RPM and a few “real” HP (as in rated for 5HP for a short time but realistically more like a Bridgeport than a VMC). Then again, Okumas (for instance) had a real 10-15HP spindle on the live tooling.

Stickout and bar size (and obviously material) have a lot to do with rigidity and what kind of cut you can take. You are also limited on tool size in many holders and they are EXPENSIVE if you need an ER32 and all you have is ER20.

For sure go learn about polar interpolation and how it is applied on your machine (G12.1/G112).