I do agree that the owner's manual has some good info, and yes, I have actually read it.
You are correct, the center diff lock should never be used on dry pavement. The reason for this is that it it forces the front and rear axles to rotate at the same speeds. Once you start turning, the front axle will want to rotate faster than the rear since it has further distance to travel (similar to left/right difference on a front or real axle differential). The difference in rotational rates is usually taken up in the diff, but if it's locked, torsional stress will build up in the driveline and it has to go somewhere, and it will find the path of least resistance, whether it be a tire losing traction, or an axle or u-joint breaking.
Using the diff lock depends on your driving situation. If you engage the lock, you are guaranteed to lose traction on at least one wheel while turning. Period. This can sometimes be an acceptable compromise. If I'm on a road with other cars and its snowy or icy, I prefer to keep all 4 tires with good traction in order to maintain control of the vehicle. If I'm off road, or in sand, snow or other scenarios where losing traction is a given or at least likely, it's more important to me to maintain momentum in order to not get stuck, therefore I engage the lock.
It's also very useful in situations where tires may lose contact with the ground (think rocks or uneven terrain) as you'll get the best power distribution to the wheels with it engaged.
Best knowledge is gained by experience, so go out and experiment! Just be safe doing so!