PDC depends on the plugin itself to report back what its internal latency is, so that Cakewalk can slow everything else down to match it. 99.9% of the time, the scheme works perfectly. It's one of the details that CW worked out long ago, before most other DAWs did.
Once in a while, though, a plugin isn't accurate in its reported latency and phase cancellations can ensue. Sometimes external hardware can also be an issue because there is no mechanism for it to report its latency back to the DAW.
It's easy enough to test a plugin by sending a sharp transient to it and zooming in on the waveform to make sure the main and parallel paths line up.
The only time you're going to routinely run into latency problems is with plugins that feature minimum-phase filters, meaning any equalizer or any effect that incorporates an equalizer. For that reason, you want to be careful applying EQ to parallel paths and avoid steep EQ boosts. Or use linear phase equalizers. These issues do not normally apply to compressors, even if the compressor incorporates a sidechain filter.
As for when you'd want to intentionally defeat PDC, I can think of only one scenario: when you have to track something new on a nearly-finished project, such as a last-minute BGV. In that case, it's acceptable to temporarily kill PDC for the sake of synchronization while tracking.