The Phantasm CD should not be mistaken for a period-instrument recording, then, simply because the instruments are old. No one in mid-18th century Germany would have played these fugues with four gambas. We are used to hearing Bach transcribed for instruments developed after his era, like Steinways, saxophones or synthesizers. Phantasm transcribes him to a type of ensemble that was already outmoded when he was writing these fugues. Still, the scoring works well.
Transcription can add color and make each voice stand out more independently.
It can let the players bring nuance to each line simultaneously. Surely, only the most puritanical harpsichordist would object. But ever since the 1920's, some nonharpsichordists have objected, and their reasons are not necessarily puritanical. It can thus provide a compromise between the complete independence of lines in orchestral transcriptions and the half-blending of a keyboard performance. It may be a scoring that suits the needs of modern listeners, then, for all its apparent antiquarianism.