On further trial and error, I find that the context of the parent view model will not be available to dynamically added elements. Which is why binding to the dynamic element is possible, while being nested in a previously bound element. (parent)
I've decided to use knockout-postbox subscriptions for this type of two way communication, unless needing to pass a literal.
If anyone knows or could point me to a example of loading nested components on demand, I'd appreciate it.