I used the setting in my last update and didn't see any problems with v8.x devices. I did have a problem with my v9.0 device where using the setting with RAF would cause a crash, but I believe RAF has been updated to address the crash.
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When uploading a bundle with manifested rsg_version=1.2, always mark minimum OS requirement as 9.0 in dev.portal. That way the new version goes only to devices that actually support RSG 1.2 - when they get upgraded to 9.0, which may take months.
I don't want to speculate / take a guess on how rsg_version=1.2 app would behave on pre-9.0 firmware. I personally don't know how rsg_version=1.2 would affect pre-9.0 FW, so i say "just don't do it" - there is no good reason to request a feature from the future, this ain't Python 2.7 (cue "from __future__ import print_function").
Yes - with RAF 2.5 or earlier, rOS 9.0 would break your ad-supported RSG 1.2 (that is, only for rsg_version=1.2!) app due to a fussy compiler error. The good news is that RAF 2.6 was rolled out last week and is currently at 90% penetration.
To be clear, your channel will not see any performance enhancements if it uses the manifest flag on pre-9.0 firmware. There is no reason to use the flag on pre-9.0 firmware.
When uploading a channel that includes the flag, be sure to set the minimum firmware version to 9.0 through the Developer Dashboard. That way, users who have not yet received 9.0 will not receive the version of your channel that includes the flag until their device updates to 9.0. This approach eliminates any risk for pre-9.0 users, while ensuring users on 9.0 have the optimized channel experience.