There is no good finish; you accept the drawbacks of any of them to get the advantages it confers.
I don't know what Walker uses. The varnish I liked the best (Mohawk's '4 hour rubbing') was discontinued years ago; maybe he bought it all. It sure was beautiful. You get the 'deepest' and 'warmest' look with varnish by putting it on 'straight', with no ground coat or sealer. This allows the varnish to penetrate the wood, where its (generally) good match with the refractive index of the cellulose allows the 'light' in. Such deep penetration also adds a lot of mass and damping, so...
The 'Rockhard' varnish is pretty good, but has some problems. Most of them can be finessed by proper application.
Nitro is a fairly hard finish with low damping. When tested by one researcher (Schleske, published in the Catgut 'Journal') on cross grain spruce strips the finished samples had lower overall damping and a higher stiffness to weight ratio than unfinished strips. Shellac had the same effect, but less. Since high stiffness to weight and low damping are generally considered acoustically good, fresh nitro is probably an acoustically good finish. Nitro is, of course, chemically unstable and breaks down over a relatively short time, but hey, who's perfect?
Because of the oil content most varnishes have higher damping than shellac or lacquer. They also go on a bit thicker than it's possible to get shellac by French polishing, or most brushed varnish finishes. Thus varnish is probably not as 'good' a finish acoustically as French polish, but what else is? I'd say that on the back and sides a hard varnish ('rubbing', NOT 'spar') put on thin should not hurt the tone much, if any. It's harder to say about the top: a lot will depend on how you do it.
Varnish is almost always brushed or padded on. I'm told you can spray it if you add a fair amount of acetone: I've never tried. Be prepared to do some sanding between coats to get it level. Maybe more than some...
Since varnish cures by an irreversable chemical reaction rather than the simple evaporation of a solvent it doesn't buff the same way as lacquer. You can't melt the surface and flow it out smooth. Rather you use an abrasive to polish it, and just keep going finer until the scratches dissappear. Varnishes can be ready to polish in a few hours, but they take months to fully cure. The shiniest surface is usually the one right off the brush, but it may not be level enough.
Varnish does most of it's shrinking early on, but this is enormously variable. Remember that there are about a half dozen drying oils, and several dozen resins that can be combined to form varnishes. They can be combined in any oil to resin ratio from about 2:1 to 1:2, which will change the properties of the final film. In addition, they need to be cooked together, and the cooking time and temperature profile make a big difference. Then there are all the variables of how thick you lay on how many coats with what drying time in between. It's a little hard to make firm predictions....
That said, a good varnish will be less hard than nitro, but tougher and less chippy. Some things that would scratch nitro will just dent a good varnish, and the dent might pull out over time.
It's harder to repair scratches in varnish. New coats don't 'burn in' as well, owing to the chemistry. Hard lacquer is the same stuff as the liquid in the can, with the addition of some solvent. Hardened varnish is not the same thing as what you're brushing on, even if it came from the same can. Cooked chickens don't cluck.
I've used the 'Rockhard' varnish, and it's about as good as anything I've tried recently. I thin it out with about 25% mineral spirits and 5% acetone to get a very thin mix, and then add a few drops of kerosene (!) as a brushing agent per pint. This goes on pretty level if you're careful. The first coat takes a day or more to dry properly, but after that you can lay down two coats per day. I can often get away with only five coats, so three days? Sand level in the morning and lightly before the second coat of the day. The last coat can be polished up with 1800 or 2400 Micromesh to get out the 'sand' and dust, and then shined with plastic polish; either Meguires or Novus.
Aside from the difficulty of touch-ups, the biggest cons have to do with recoat times and witness lines. This particular varnish seems to harden from the top down, so each layer is harder on the surface. As you sand through to a previous coat you go from a soft layer to a harder one, and get a shiny 'witness line'. The acetone helps some with this, as does recoating as soon as possible after the prior coat. It might also help to wait about three months for the stuff to cure all the way through before polishing. I dunno; I don't usually have that long. Otherwise you just have to get it smooth enough so that you don't have to cut through coats to get the surface right.
Hope this helps.
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