The nylon is technically a jacket installed over PVC insulation. The nylon primarily provides a decrease in pulling resistance, making pulls easier. It also does provide a small amount of mechanical protectection.
Nicks in nylon are common an are not a problem. However nicks in the underlying PVS inulation are an issue. Most specifications don't want to have to make an insulation assessment so they say "no nicks in the nylon" as a way of guaranteeing no nicks in the PVC.
