Other than the difference in pistons there is no CAT and the FI is different.
 The ECU does not control the spark, the distributor does.

The CAT could have caused the engine to run hotter with the US emissions
spec, which is bad for the engine.

If the engine was air-cooled the compression heat would shorten the life of
the engine. The compression rule for air-cooled is 7:1 for a street engine
that will live past 25 to 50K (sometimes less)

The water-cooled cools the heads better and allows for increased compression

Adding Ceramic coatings will allow one to increase the compression to @10:1.

The probable reason why there is no knock sensor is the Vanagon was NOT tuned
for performance...as inline engines that pushed the performance to the edge
of detonation, therefore there was a need for it in the inline but not in the
Wasserboxer.

The throttle body is a single opening NOT the dual throat found in the inline
engines,

The air runners are long and small-needed for low end torque needed to start
the HEAVY Vanagon from a stop (the gearing is also low for moving off a LOT
of weight: passengers, gear, etc.) as compare to the inline engines which are
short and fat- what is needed for high rpm power.

The stock exhaust has a lot of back pressure- this is also needed for low end
power, while the inline is less restrictive plus it has a lot longer to go to
get out- this aids in high rpm power.

The cam profile is almost the SAME lift and duration as the T1 Beetle tame,
the inline is more aggressive.

The engine is built along the same lines as the T1 engine, which it is based
from, to be able to cruse all day at Max stock speed.

The engine makes it power in the lower RPMs while the inline make their power
in the upper RPMs AS designed by VW.

My engine is also built along the same VW philosophy, But with a twist...

It now has more power AND better gas mileage.

Robert