What is lost
Volatile aromatic compounds, which is most of what makes a fresh leaf smell of itself. The lighter the compound the faster it goes, which is why citrus-scented leaves and delicate flowers suffer most. Drying temperature is the single biggest variable: shade-dried material that still crumbles rather than powders has usually been treated properly.
What is concentrated
Everything non-volatile — sugars, acids, tannins and bitter compounds — because the water leaves and they do not. This is why dried fruit is sour rather than sweet-smelling, and why several dried leaves are more astringent than their fresh form.
Where drying improves things
Bay leaf is better dried than fresh, and oregano concentrates rather than fades. Both are cases where the harsh green note goes and the resinous one stays. Anyone who has only used fresh bay has met the less pleasant version.
Where drying creates the flavour
Valerian is the striking case: its characteristic smell develops during drying and is not present in the fresh root, which surprises everyone who has grown it. Fermented leaves — ivan chai, fermented raspberry leaf — are a deliberate version of the same principle, where a controlled process before drying builds a flavour the plant never had.
Why frozen sometimes wins
For the tropical aromatics whose character is almost entirely volatile — makrut lime leaf, curry leaf — freezing preserves far more than drying. Both are sold frozen in shops serving the communities that cook with them, and the frozen version is closer to what the tradition uses.