Of course, the high speed drag issues created by fatter blade roots and hubs is less of a problem with a tilt rotor aircraft like Karem's.
Thats debatable, in airplane mode on a tiltrotor, a high t/c ratio becomes more frontal area profile drag and essentially equivalent to a much larger spinner....all of which put a cap on Vmax. It would be tough to qualitatively determine which design paradigm takes a greater "hit".
But Karem's main problems are weight and tuning.