What's wrong with pool overflowing?

In your case, probably nothing. If you had a vinyl lined pool, water might get down between the liner and the wall. If you have an above-ground pool, there will always be a low spot, even if it's only 1/16" and that's where the water will drain. That area will end up getting softer than the rest, which may make the pool sink on that side, which makes it drain more, and eventually the pool is visibly off level and might collapse.

I like to drain in advance because I divert the rain gutters to my pool to reduce the CH buildup. If my water is 2" too high, I'd rather lose 2" of saturated water than 2" of diluted water.
 
I think the biggest problem is that skimmers don't work when the water is high. All of the junk in your skimmers will go back into the pool when the water level gets to a certain point, maybe at 3/4 up the skimmer opening or so. Until the water gets back down to that point no skimming.
 
+1 re: pooldv's statement. I have found that my skimmer does not work as well. In advance of storms, I will go out and throw in my three-quarter horsepower sump pump to drain the pool some.
 
I just had my pool put in last year and I was amazed how quick the water level would rise during a heavy rain storm. I have a safety cover on mine now and I have had to drain mine several times over the winter due to it getting close to over flowing from rain and snow.
 
There is a joint between the top of the tile and the coping, or cantilever that you do not want flooded. The water can travel through that joint (even if it has been sealed with grout, mastic, or another type of sealer) and you can develop a scenario where your decks could move from the water intrusion. In some cases, not a lot of movement, but any movement is not good. So we say try to keep the water off that joint.

If you have an auto cover, you want to keep water off of it. Too much water will 1) Put undue stress on the cover (weight of the water) and 2) that weight and volume will actually displace water in the pool. Forcing it over the cover box wall and out the box drain. Then when you finally drain the water off the cover and if you don't open the cover, you could miss the fact that your pool is now low on water and will have a problem with the pump not being able to prime.
 
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