you mean you use on your bench grinder as done here?
-Not on the bench grinder. I used them now and then in a surface grinder. In a previous life I was a tool and die maker. Either from engineering changes or needing to repurpose an obsolete component I would have to carve out/off relatively large chunks of hardened tool steel before grinding to precision dimensions. Grinding off large chunks isn't fast or fun so I would mount a thin cutoff wheel in the surface grinder to speed up the process. You can simply make intersecting cuts to remove a corner but what if you had a 1" thick plate that required the thickness reduced by 1/4" or more? Many hours of grinding and wear out at least one grinding wheel in the process? I'd use the abrasive cutoff wheel to make a series of slashes (imagine a hair comb) to depth so I had a series of standing ribs. I'd then used a brass drift and a hammer to break off the ribs. Now go back with a regular wheel for the surface grinder and go to the precision dimensions needed. This works well with hardened steel, not so much with unhardened/soft steel. You're only limited by your own imagination when milling, turning, grinding. Oh you're also limited to how safe your imagination becomes too. I really don't like grinding with the side of a wheel. The thinner the wheel the greater the risk of exploding that wheel. It's scary and too fast to react to.
I did consider the pros of using abrasive wheels since they're cheap and will cut through anything
-They'll cut through most materials until they get gummed up or glazed. Aluminum, plastic, composites, aluminum-bronze alloys (Ampco), and a few other materials are notorious for clogging abrasive wheels. Ever seen a bench grinder with bits of aluminum stuck to it because some idiot tried grinding aluminum? Abrasives work provided the pores aren't clogged or the wheel isn't glazed. Even an India stone can get clogged with particles (shiny surface) and won't work properly until the pores are cleaned out, which is why you use most hand stone wet instead of dry.
-Abrasive type wheels are supposed to wear when the surface (periphery) grains fracture and expose new/sharp edges in the grains. Imagine a squarish corner of the grain that just gets rounded and is no longer sharp, it just rubs instead of cutting. That's how abrasive wheels get glazed and no longer cut. There's a balance of grinding pressure and heat involved with abrasives. Too little or too much pressure and the grain fracture you want won't occur. Too much heat can either affect the resin bond in the wheel (if it has resin) and/or ruin the heat treatment of the steel. Burning a knife is an example.
-Even the cutoff wheels can get gummed and not cut well. I watch the shower of sparks for change and feel the pressure needed to cut when I'm doing this. For the abrasive chop saws in the shop most often it's become glazed/clogged because somebody didn't know what they were doing or had to cut reinforced hydraulic hose. Then it's best to use a dressing tool/stone. There are various type for different types of wheels and you should research this if you use abrasive wheels. Diamond/CBN wheels use a special dressing stick, even belt/disc sanders use a special dressing tool to unclog the abrasive grains (a crepe-soled shoe works too).
but thought the diamond wheel was cheap enough to be worth a try....I have installed one and did a test cut w/satisfactory results. I know they make screw-on cutoff/grinding wheels that can take side loads and aren't grinding-wheel thick so that would've been my choice...despite not being able to make thin cuts. I don't know what makes these steel cutting diamond blades different than tile blades or if they're less likely to gum up w/steel...
-It's all about the particle size, the matrix they're bonded in, and what material is being abraded. Using diamond/CBN abrasives in the jig grinder works great on hardened steel but I'm not a fan of using them anywhere else. That's just a personal opinion perhaps formed when diamond/CBN tooling was expensive. Other folks like using them and my opinion/preference doesn't make their opinion/preference wrong for what they're doing. I balance my choices based upon cost, availability, and previous experience. You'll do the same for your choices.
I've had a few jam and break before on grinder w/no major issues as it seems like the 'shards' just pulverize
-That depends upon what the target is. They don't pulverize very much in skin but do in bone. Imagine your face....
and lose their danger when off the aramid matrix
-The danger of impact may be diminished when they don't go very deep in your skin but still present a danger with what they introduce into your skin. Abrasives create some nasty infections with the carried metal particles when deeply imbedded and don't readily wash out. I've had infections that I battled for a couple of weeks that limited the use of my hand at the wound site. Tetanus and blood poisoning are possible. Infection can even begin at the fingernail cuticles for some if exposed to the "spray" of sparks. Everybody has different levels of susceptibility to the heavy metal alloys. Gambling with your immune or respiratory system can have bad consequences so be safe. An old friend of mine had to occasionally grind beryllium-copper (BeCu) alloys for EDM electrodes at work. He developed reparatory problems by age 50 that will stay with him for life. I'm still spitting out aluminum-oxide particles from all those years of surface grinding.
As a 'lathe novice' myself, I think what was novel was using a threading tool for parting. Your cut won't be flat (unless chamfered flat) but if you need to part w/o a faced edge this may be worth a try.
-Shapes of cutting tools for the lathe are only limited by your imagination and how well you understand tool geometry. Having a particular shape/feature ground into the cutter means it's always the same, foolproof, and done in one cut. This is not only convenient but it greatly speed up the machining process. I fully encourage you to explore what creating your own lathe cutting bits can do for you. Hope this helps.