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Both can be true.  If you pull your hair tightly and bind it, you can stress the hair and cause breakage or splits.  The metal connectors on the elastics can catch the hair and tear or break it when you remove the elastic.

As long as the fabric is not rough, a scrunchie is great for ponytailing or bunning your hair.

Fabric-covered scrunchies are great in many ways, but when I don't want colored fabric flapping about my head, I usually use the covered, non-metal elastics.  There is such a good selection out now in different sizes and hair-coordinating colors.  Nice to use in conjuntions with updos 'n stix because they don't show.

Last week I tried a new product by Scuncii, they are nylon bands.  The package says, "NO METAL, NO DAMAGE!"  They also come in hide-in-your-hair shades.  I bit & bought a pack.  OK: if you have any amount of hair at all you can get one use out of each, then it's too stretched out & warped to re-use.  They hold pretty well once they are in, BUT they take hair out when you take them out!!   Oh, yes!  Broke off a whole hank of hair that I can't spare!  I think this is due to the way they stretch & warp upon removal.

Into the garbage they went!

I have found that the "ouchless" suiinci (don't remember how to spell it, yikes!) brand hair ties do not pull my hair at all, and they stay in place, which is saying something with my thick heavy hair. I don't know, maybe it's just cause my hair is tough, but they have never ripped my hair.