VDP1, in general, has many restrictions.
High-res modes place even more restrictions, the most critical being that the frame-buffer becomes 8bpp rather than 16bpp which breaks the more "intelligent" texture mode.
Really Nice!!! Solid texture mapping with better textures and nice lightings. VDP1 support 128x128 textures? Maybe u can try use VDP2 scroll plane as a big wall and put a high texture resolution with no impact in frame rate like panzer dragon saga do in elevators scene. Your demo look better than many N64 texture map.
Latest video showing collision detection tests.
It still has issues sadly, which will take a while to fix, perhaps even a full rewrite of the engine since BSP are tricky beasts (It's only been like the sixth time I restart with a new engine...).
Still all 64x64 textures, all gouraud shaded. The weapons are drawn by the VDP2.