Excellent job laying out the differences between the two bags, as well as their pluses and minuses!
To the OP - I have the Lou camera bag and the small loulou, and I love them both. It really comes down to how much you plan on carrying when you’re out. As Thundercloud mentioned, the toy will definitely hold less than the camera, but if you’re only looking to fit a card case and a few other small items, you should be fine. The camera bag holds a fair amount for a smaller bag, but it does seem more casual than the toy (especially when the leather strap is swapped for a chain). As far as the tassel on the camera bag goes, I hear ya! Mine was purchased in 2019, and as soon as I got home I removed it! In regards to wear and tear on the toy, I can only speak to how my small has held up (with admittedly not all that much use), and there are definitely creases in the leather from the flap opening/closing. That being said, my camera bag has a ton of creases as well!

Good luck with your decision, and please let us know what you end up doing!