Every vehicle has a limited amount of clear coat. Once the clear coat is gone, it's gone. When polishing your car or a clients car, you want to make you use the least aggressive method possible to ensure you're leaving as much clear coat in tact as possible.
There can also be variances in how hard a clear coat is which will play a part in determining whether you need to cut or polish. Again, doing a test will allow you to figure out what you need in order to get the job done. It's also worth nothing that a lot of times you can get away with polishing most of the surface and only cutting in specific spots where the defects are bad.
If you have any questions, leave them in the comments and we'll be sure to help you out!