Lane "Yoda" Baggins made an interesting point in
a recent interview that Reformed Churches will likely get along a lot better with the FV when they're not in our Presbyteries or Synods insisting that they are Confessional and trying to re-work Reformed theology from within Reformed bodies. I obviously have serious problems with their views of Covenant and how one is united to Christ but once they're outside of Reformed Churches then it will be less problematic.
But, once they stop calling themselves Reformed, their views on what baptism confers are really not much different than the Anglican or Lutheran views. I believe it is error but the more serious error of the FV is, as noted, a view of justification that tries to shoehorn sanctification into its definition. Obedience is equated with trust and it is no longer a laying hold of Christ and His righteousness alone as instrumental to our justification.
Of course, with any theology, it is sort of impossible to separate one error from another and the baptismal view cannot be fully divorced from their view of justification.