Although I agree with everything you say, I have some questions. Also, I am going to challenge the essentially correct message from the anecdote told, deliberately.
I would start with the question of where Plato got his insights from, i.e. what was his own childhood like? If he had a father who was equally imbued with the insight that less is more, where did the father get his wisdom? And when that father was a young boy himself, who taught him? If you start from a chain of parents and children who all learnt that virtue can be exemplified but not preached, how did it come about in the first place? What life experience turned them into those who know but do not impose their knowledge on anyone?
Even a king is only a man who, because his people observe him, is reflected by the people and is reflected in the people. But where no one observes each other, correction can hardly take place. Wisdom does not come out of nowhere, it is often only achieved when one realises one's own error. But how can you realise that you are mistaken?
As a person born into a family, you will have those who exemplify virtue, but you will also have those who do not. Those who can give eloquent reasons for every vice will find their way to the individual just as much as those who refrain from doing so. How do you know one from the other?
Does a young man who indulges in vices automatically become a virtuous person simply because he has a single male role model who instils confidence through his strong presence and non-interference? I don't rule that out, but I would call it rather the exception to the rule. The given story is from my point of view an exaggeration to get a point across.
Every man, whether king or father of a child, is also a fool. Nobody is always wise, just as nobody is always a fool.
The king who outwardly exemplifies wisdom needs a corrector when he threatens to go in the wrong direction. Because he will. Now the inner world of the king is not visible to the people in every detail. They see the result of a king who takes advice, who deals with a conflict with those who are his partners in the conflict. If he is in doubt and needs to reflect on what and how he intends to do something, who does he turn to in the final instance? Does he accept that his authority is ultimately only on loan? How can he have humility when he is the one whose word counts?
How should the people interpret the king's decisions? Should they see that he does it with ease or should they also be able to recognise that he has struggled with himself?
The family as a unit exists within a structure of other families, which in turn are embedded in a larger community.
A young man who has attitudes and fluff in his head needs a strong challenge, he has to experience boundaries. If he is not given one, he will not find the necessary virtue. He needs strong role models who serve as challengers by confronting him with the consequences of his capers. So if Plato had an influence on his nephew, it was not just because he was the way he was, but because he must have dared to take the young man by the horns.
The idea that strong role models only make an impression on young people through their own actions and omissions is not entirely wrong, but not entirely right either. The world out there is full of temptations, charlatans and amusement. Plato too will have encountered people who contradicted him, he will have had to deal with people in his house with whom he debated. Was the young man able to observe him and what did he learn?
It is possible to teach someone who gains insight by observing their role model, but presumably only if there was already something in that person that made it possible.
I understand that you wrote the text also out of your personal perspective. I would describe you as someone who is exceptionally mature. The given message you grasp in its deeper sense.
Now, someone else, reading this, may think that all one has to do, is to let things happen and be virtuous. The term "correction" may be seen as something bad.
I am curious about your response. Greetings!