"Forgive my ignorance, but did the Follies concert in 1985 not also perform the script? Was it literally just a concert of the music, and not an Encores!-esque minimalist presentation of the actual show?"
I'm pretty sure there was only minimal dialogue included.
"The reason I ask is that if the show was just music, then I can't imagine them casting anyone they didn't want singing the song the way the creative team wanted to hear it. If the concert was more than just music, then I presume they liked what the performers brought to the role overall, including but not limited to song interpretation."
I think -- and I'm sure some people would strongly disagree with me -- that some of the roles were cast more for star quality and box-office draw than appropriateness for those roles.