What I mean by legal insulation is more that, in this holding construct, the GmbH ceases to have any financial relationship to the founders. Stiftungs are sort of... headless financial pools governed strictly by their founding documents, completely divorced from the people that created them, and the GmbH would simply be an asset in that financial pool. That means that, for example, were someone to sue the founders, even for something completely unrelated, there is no possible way that shares in the GmbH could possibly end up someone else's hands. Typically when we talk about the liability limitations in corporations, we're talking about them in terms of shielding the founders from the actions of the company, but the inverse is in my opinion just as important (if you're truly interested in forming a self-governing social organization pursuing a social good). I'm not sure if there's any examples of shares in a gGmbH being assessed as assets in a civil case; that would be another interesting question to inform the decision.
That being said, one of the reasons that I'm so interested in the idea of a Stiftung holding, is that I think it also opens up options for actual democracy within the leadership of a company, which is a fascinating idea. That isn't a requirement in a Stiftung holding relationship, but I do think it's an interesting possibility.
At any rate, I think probably the primary downside of this idea is that, like I said, I've not seen any examples of it discussed publicly. Which means you'd need to be doing a lot of the legal legwork on your own -- which means lots of time spent talking to lawyers, which would be really expensive. But I think there's some really interesting possibility for innovation in terms of corporate governance here, in a way that, like I said, wouldn't be legally possible in the US, and it definitely seems like the structure that gives the social purpose the maximum possible protection.