Alternative to digital rotary encoder

Thanks for the comment. I shall come back with a calculation on speed variation relative to torque variations. But reluctance cogging moment got a lot to do with this. This cogging moment is also seen with BLDC motors, unless they are more expensive and designed to avoid it. Coreless brushed DC motors got no cogging moment, but I have not seen many coreless brushless motors yet on market. Coreless motors need more weight for same power performance.

I cannot make sense of your calculation. 123 rpm is close to 120 rpm, and it is two revolutions each second. It makes one revolution in 0.5 second and 0.55 second is shown in plot. I do have some step responses when the speed reference to the control loop is given a step. Is this what you like to see?