I embedded Lua both ways (.a vs .dll). Not sure now, but I think that it is then ~thing in itself and require()-ing external dlls will mess with your runtime badly, but again it was some time ago and maybe there was a way to export .exe api to 3rd-party dlls instead of lua5x.dll found somewhere in path.

Anyway, a single executable makes it hard to argue, and in this case I agree with you and ggp.