I prefer to peen the heads of the pins to rivit them in place. On a big knife I've used really hard, the pins have moved somewhat despite them being rivited and glued. I should have peened them more.
As you create the mushroom, and the pin expands laterally inside the hole, it can cause fractures/cracks in the handle material either immediately, or later as the material may expand or contract.
I would think this would be less of an issue on handle materials that are rather stable, such as micarta or pearl. Either it would crack right when you do it, or not at all. Except in the case of the pin holding a slipjoint spring- the pressure from the spring being worked back and forth could cause trouble down the road, peened or not.
On those materials that could crack over time, I think some methods of peening/mushrooming would be worse than others. If you pound directly on the center of the pin to rivit it, you expand it much deeper/further down. If you really wail on it, you can actually expand the center of the pin more than the head. However, if you make little taps around the edge of the head, you just expand a thin lip which should press more downward on your scales, rather than expanding it inside the hole. You can anneal the very ends of your pin to help this.
maybe this exists already, but what about having a thin 'sleeve' of harder steel around the rivet material so that whe compressing/hammering the rivet it doesnt expand lower down in the scale and cause damage?
This was used on some antique bowie knives, and I plan to use a lipped washer thingie for the same reason next time I make a full tang bowie. I don't think it would necessarily have to be made from hardened steel; just something stout enough to constrain the expanding rivit. I think the washers sometimes used on Mike Price knives illustrate this too.
