I think it would be nice if, after scrolling to the bottom of an embedded note, the continued scrolling down would switch the scroll mode to note scrolling rather than embedded note scrolling. The same could happen when you have scrolled to the top of an embedded note and continue to scroll upwards.
There could be a slight delay to this behavior so that when a user doesn’t want to switch to note scrolling, they have a chance to react.
This may require some nuance to allow the next embedded note to scroll up in note scrolling mode until its top reaches the top of the pane then entering embedded note scrolling again, assuming cursor is within embedded note. And the same behavior in reverse.
The gutter on the side of the embedded notes is understandably narrow making the normal note scrolling behavior somewhat requiring of focus to place cursor in gutter.
Ideally, I think it would be best to be able to have an option to embed notes as fully visible, but I have requested that separately, and do understand the optimization and navigational benefits of the current behavior. Maybe there is a balance that can be found depending on what others think.
Thank you developers, for continuing to improve Obsidian at such a pace.