@MatthewNewell@mastodon.social @Andres4NY@social.ridetrans.it @bobjonkman@mastodon.sdf.org @ascentale@sfba.social @DurableAce@social.vivaldi.net @bikenite@fedigroups.social I don't think water ingress is a particular problem with this stuff, the spacer isn't porous. (It's originally designed to be a microphone cable, not for RF, so the internal insulator is just solid plastic, without any air spaces.) Also, since you'd wire it so the outer conductor is 'ground', the jacket wearing through and the outer conductor shorting on the bike frame shouldn't cause the lights to stop working; it's just another layer of protection for the inner, which itself is about as robust as one half of a bell-wire.
By far the biggest issue is that unless you're well practised with crimping/soldering/heat-shrink, it's easier to make a poor termination with coax and spade connectors (unless you fork out for the expensive pre-terminated cables).
(One thing I love about the Shimano and Shutter Precision dynamos is that you can re-terminate the 'lego brick' connector with nothing more than a pokey-thing and something to strip the wire. They're also more inclined to disconnect without damage when you forget to unplug before removing the wheel, compared to spade connectors. Less robust than the Schmidt approach, but really easy to repair.)
FWIW: I have bikes with both types of dynamo/wiring, and they've never given me problems. I've had a light that was faulty from new (replaced under warranty), and another one damaged in a crash, but the dynamos and wiring Just Work™. Meanwhile, I've had countless issues with battery lights, mostly involving poor quality brackets, water ingress (particularly on rear lights) or dodgy battery contacts.