I've been using this technique for years without any real issues - I have an Anova that I bought for cooking and I just attach to the side of the kettle outside the bag. You have to fiddle with the rotation of the device to avoid having the bag sucked in, but once you get it dialed in the temp differential across different parts of the mash is at most 1-2 F. Because I already had the device this was a way to do BIAB for just the cost of the bag.
I haven't seen the issue with caramelized wort burning on - but I haven't tried it with high gravity beers. I'm doing a full-volume mash, so that might be the issue. I just clean it off with PBW (or in a pinch, dish soap...).
Edit: And it can certainly hold 154 F just fine even without kettle insulation, although it can't raise 7.5 gal to strike temp in a reasonable amount of time. I brew stovetop so the Anova is just a little boost for the gas stove.