Does LPC1343 USBCDC example lack flow control when sending from target to host?

When using the NXP/Keil usbcdc example, data appears to be lost when sending large amounts from target to host. Does the Keil usbcore/usbcdc lack flow control, or is this a limitation of the usb cdc specification?

Target: LPC1343
Compiler: gcc
Host: Linux (Ubuntu)

vcomdemo.c V1.02
cdcuser.c V1.10
usbcore.c V1.20
serial.c V1.10

Changes below were made to the usbcdc example, to send an incrementing stream of bytes [0..255].

cat /dev/ttyACM0 > capture
hexdump capture | less

* serial.c *

int ser_Read (char *buffer, const int *length) {
        static int increment = 0;
        buffer[0] = increment++;
        return 1;
}

void ser_AvailChar (int *availChar) {
        return 1;
}