Seat damage is a trivial matter, and a risk that's generally tolerable. Note that every metal seated PSV has a high risk of leakage after activation, due to seat damage. Chatter is a concern because it risks: (1) insufficient relieving capacity, and (2) loss-of-containment due to mechanical failure of the installation. The flowrate through a chattering valve is only a fraction of the valve's rated capacity, and this will cause the system pressure to rise. In most cases an equilibrium will be reached, at which point the PSV operates in a stable manner, albeit at an pressure that's probably greater than the allowable accumulation. The risk of loss of containment, due to mechanical failure, is much higher for PSVs in liquid service. That's because the force of impact, which occurs during each open-close cycle, is much greater in a incomprssible fluid service. Loss of containment can occur with a chattering PSV in incompressible fluid service, but the risk isn't as great.
To minimize the risk of chatter, most design codes require the inlet pipe (x-sec area) to be at least as large as the PSV inlet connection. In this particular case (8mm pipe leading to a 20mm PSV inlet), the restriction is severe. That's not a good design. It's a code noncompliance, and most likely it's an significant safety risk.