Nandi,
sorry for the late response, but I have had to gather some equipment first to reproduce this behavior. I have setup a very similar system with a servo and a closed loop stepper and I have used your code for a test.
The bad news is, that I couldn't reproduce the problem. First I have worked with two servos but I couldn't see a significant following error with those, but in fact I wouldn't have expected a sustaining following error with a servo at all, as servos can compensate following errors during the moves.
In a next step I have used a servo and a closed loop stepper but I have seen the same result. No significant following error during the move. I have also switched the X and Y axes, but there was no change. I have also played around with the other move parameters but again, no significant following error.
With this said, I don't think that we are facing a general issue here that is related to 73xx motion control boards.
To me this looks more like an issue that is related to problems with load inertia and high acceleration values. In fact if you reduce the radius of an arc but keep the vector speed, the forces become higher and in your case they seem to become too high for the stepper motors. A stepper motor can't compensate step loss during the move. That's why you see this constant following error.
I hope this analysis hits the bull's eye.
Kind regards,
Jochen