TRD, we are talking about flesh and metal interacting. The model is not a static one because the horse is alive and moving and unknown torque from multiple directions can be applied via the reins. The bit doesn't necessarily hang down when the bridle is holding the bit whereever it is adjusted to. There is opportunity for pinching regardless of whether you recognise it or not. There is opportunity for cutting because the diameter of the chain is small. If a horse can cut their mouth with any bit, why is it so hard for you to admit the chain bit can cut a horse?

There is no way to guarantee the chain will lie flat against the lips. Especially with a loose ring there is opportunity for a sawing action with the chain. If you could cover the chain with a rubber sleeve your argument would be more valid because the bit would be kinder. BUT as long as the links are interacting on flesh I cannot climb aboard and endorse the chain bits.