There are primarily two things that those laws are concerned with: preventing fraud and preventing a shortage.
Shortages aren't much of an issue anymore, as so many transactions are digital, and fabric / paper currency doesn't have any precious metal. The actual value isn't lost, and is easily replaced.
Defacing currency to pretend a bill or coin is one of higher value is pretty hard to do simply by cutting. Most businesses won't take such heavily damaged currency, and banks won't exchange notes with less than half of the original present. Collectors hoping for rarity ("mistake" bills) are, like any speculator, on their own for verifying authenticity (ensuring serial numbers are right, usually).
More to your point, you've answered your own question. Non-fabric currency can also easily be damaged. The convenience and cost of printed fabric / paper versus stamped metal outweighs the risk posed by weakness to damage, and replacing a certain amount of loss each year is generally expected.
Shortages aren't much of an issue anymore, as so many transactions are digital, and fabric / paper currency doesn't have any precious metal. The actual value isn't lost, and is easily replaced.
Defacing currency to pretend a bill or coin is one of higher value is pretty hard to do simply by cutting. Most businesses won't take such heavily damaged currency, and banks won't exchange notes with less than half of the original present. Collectors hoping for rarity ("mistake" bills) are, like any speculator, on their own for verifying authenticity (ensuring serial numbers are right, usually).
More to your point, you've answered your own question. Non-fabric currency can also easily be damaged. The convenience and cost of printed fabric / paper versus stamped metal outweighs the risk posed by weakness to damage, and replacing a certain amount of loss each year is generally expected.