Ignition cut is much safer than fuel cut, No fuel = lean engine = Engine goes pop with enough limiter abuse.
With that being said, Ignition cut can damage your exhaust (Mainly the cat), turbo exhaust wheels (Especially if its ceramic and not steel), and sometimes the shock from the bang can break rocker arm stoppers. (Only ever heard of this happening on Sr20det's though, but im sure theres other fragile parts in other engines that could be damaged)