Can Testing Cheats really damage your game?

I don't know about the sims medieval game. I only know about sims 3. It's okay to turn on the cheat code and use it, but you need to turn it off right away after using it. Never save with a cheat code active. That is what messes up your game big time in Sims 3. For example, I use MOO to crowd objects together in my game. If I turn it on and move a lot a stuff, anything that the objects I'm moving have touched... might show solid for a window or door and you have grab them and let go again. The main problem is that the floor tile can disappear on the floor below or above. So you end up having to move everything off those tiles and replacing the tile above and below. For CFE, you'll often get extra floating tiles that you don't notice until later. Then you have sledge hammer them from either above or below (floor tile versus ceiling tile). Of course, CFE can really mess up elevation inside a house, so you really just turn it on and do what you need to do. Then you turn it right back off.

I don't know about what it might do for static needs. I do use resetsim to send stuck sims home and then they'll pop out of bed in the middle of the night and I have to tell them to go back to sleep.

Some cheats are probably less harmful than others; but for the most part, you should turn the code on, use it, and then turn it right back off.