Regards page layout and typesetting horsepower, sure, APP is able to build more complex layouts and solve more complicated problems than XSL-FO. What I meant by the word "subset" is related to the XSL-FO specification, which clearly defines things like: typesetting behaviour, whitespace collapsing behaviour, block model, and so on. There are variations in the algorithms and approach of APP composition versus the XSL-FO specification. FOSI is actually more closely aligned with how XSL-FO "thinks" about page layout and typesetting (I suspect the same or similar people worked on both specs).
Last time I looked closely at implementing XSL-FO in APP there were enough differences in behaviour that it would be very difficult (costly) to correctly or completely implement XSL-FO on top of APP. APP now has a more robust block model so I'd guess it would be a lot easier these days. Either way I think it would still be a bit of a struggle to achieve 100% compatibility with the XSL-FO spec.