I *have* damaged paint with a PC, and it was the older version too...4" green Cyclo/Edge pad, 3m 05937 Machine Glaze(!). Just got too aggressive, thinking "eh, I'll never do damage with this mild stuff!". Famous last words! Note that I've never done comparable damage with a *rotary* despite getting *VERY* aggressive with those. Years ago at the St. Louis Autopian G-T-G, a pal of mine damaged a Benz using my PC with a Meguiar's 7006 pad...yep, a 6" pad on a PC! So it *can* happen, but it's still not too likely.
On the LSP-via-Machine, I go both ways. I can do it faster by hand if you factor in getting out/putting away the machine. But the motions of moving the machine around are very different from the motions of LSPing by hand and I prefer the former. Yeah, still gotta do a few spots by hand, but not that many once you're familiar with machine-LSPing the particular vehicle in question. By machine, I can get an especially even application, but I fair better with waxes than with sealants, just can't quite get as thin an application with a sealant using a machine and I end up wasting product. But with waxes, I do like being able to "work the product" (especially with M16, the "paste wax that turns liquid") and IMO the machine is *much* better for that. I do prefer the Cyclo over the PC/GG/etc. for LSPing, but eh, that's just me.
If you've never tried M16 via machine you really oughta give it a go. I do think I get a better (OK, *slightly* better...) end-result, especially if I use a little QD (generally Griot's SpeedShine) to add a bit of pseudo-spitshine to the process. I almost *enjoy* doing my wife's A8 with M16 via Cyclo. Almost.