Congratz Nick on rolling your guide out! I've been doing this sort of stove- top BIAB/ dunk sparge + over- gravity boil for a while now, it works just fine and I'm pleased to see other folks coming to the same conclusion. It makes brilliant AG beer with easily- obtained and cheap equipment, plus, even with the smaller kettle, the batch size can be on par with other methods, but the risks involved with this are quite minimal (just the smaller stockpot and BIAB bag) compared to setting up even a basic traditional multi- vessel system, so more folks do have AG as an option to try out and it won't be risking the farm if they find it just isn't for them.
FWIW, I actually have a couple of legitimately- owned stainless firkins that I has grand plans for in a multi- vessel setup, but this stovetop method works just fine for me so I still use it and advocate others do the same.
I've also done a few post- ferment dilutions, I agree completely with TB- unless fermenter volume is a limiting factor then it really isn't worthwhile for the risks involved plus the extra PITA. By all means try it, but I found there wasn't any great benefit. Flavour from high- gravity fermentation was slightly different, not better or worse, just slightly different. Bottling a few of the undiluted beer gives you a couple of extra- strong variants of the batch which are useful for comparison, though after a couple of tallies of it I had to have a brief spell lying down!
I also harvest the last few hundred ml of wort from the boil gunk for yeast starters, just about any cloth would do as a filter but I use a cone of material that is for running cooking oil through to rejuvenate it, fits in a large sieve but also a funnel. Dilute (or not) and freeze in a plastic bottle, then when needed just thaw and transfer to a tough glass bottle for steaming and sanitising prior to inoculation.