Bob,
In theory it should avoid the hydrogen embrittlement because it doesn't use electricity right? Well, not so simple. My understanding is both produce hydrogen, but electroless nickle creates less than electroplated nickel. However the main culprit is the acid cleaning/etch step immediately prior to plating, which places far more free hydrogen at the surface of the base metal than the plating does. It comes from the water surrounding the part. It is this hydrogen (atoms) that migrates in amongst the base metal lattice at the surface and subsequently trapped under the plating that leads to the problem. Either way, baking seems to be the remedy.
I see two problems with using electroless nickel to build up parts. The deposition rate is much slower than can be achieved with electroplating, and maybe there is even a limit to the practical thickness. Second, the adhesion is not as good. I have used electroless nickel to barrel plate large quantities of small nuts and screws. I found it very prone to chipping off at the corners of the nuts when a wrench is applied and alongside the screwdriver slots. These were parts done by a commercial plater, who I assume knows the proper way to do it (90% being preparation). Of course, perhaps they botched it, but all the other types of plating work I have had then do is very good (and I have tried many different platers over the last thirty years.) So I don't trust it for applications where there is highly localized pressure.
For building up a journal that is slack where a ball bearing presses on, or a flywheel taper, I suppose it would be o.k., but you would still need to bake the part. For heavy builds (chrome, nickel, or whatever) I understand the recommendation is plate a little, bake, and then plate on the heavy deposit. Hydrogen atoms are cunning little escape artists, but the thicker the overburden of plating, the harder it is to drive them out of the base metal surface. The preliminary plating acts as a barrier to any free hydrogen generated during the subsequent plating.
-Doug