The RIAA curve itself doesn't cause problems because the record curve and play curve are complimentary, the result is flat (assuming both are accurate, which is not always the case). But since the cutting stylus has a maximum velocity based on physical dimensions of it and the groove it's cutting, the combination of that and the RIAA record curve creates a rather non-flat maximum record level which is usually responded to in mastering with peak limiting that follows the maximum level curve.
Rather significant distortions occur in playback because of a list of problems, many grouped into the tracking induced distortion.
HiFi VCRs were HiFi in terms of frequency response only, which was why they were developed over the linear tracks. But the noise in the AFM carrier system mandated a companding noise reduction system, which failed to adequately hide the head switching noise components, limiting the serious application of the technology for any real high fidelity recording. It worked best when there was picture to distract from the sound issues. Some duplication plants used additional dynamics compression in the chain in a failed attempt to hide the noise.