SSH tunneling is encapsulating byte streams in TCP, not TCP (which means "packets with sequence numbers, acknowledgements, and retransmissions") in TCP, and therefore doesn't suffer.

Well the byte stream includes everything you throw in (TCP/UDP/L2), so while the tunnel will not suffer from any signaling issues in the payload flow, the opposite is not true - the internal traffic is affected by any TCP problems on the SSH tunnel so a short blip on the tunnel can cause a cascade of blips depending on whats in there.