None of the above are the problem. As you say, trees can grow around things. The reason for using straps is to reduce the point load on the tree's inner cambium layer. That is the layer that transports sap up and down the tree trunk. If that is sufficiently damaged the tree dies. The thinner the line around the tree the higher the load per unit area and the more likely the inner layer will be crushed. Using flat webbing increases the area for a given weight so decreases the internal pressure load per unit area.
If you need a visual aid think of a wire frame cheese cutter. The wire goes through the cheese relatively easily because the force per unit area is high on the thin wire for a mild pull on the handle. Try holding the wire and pulling the handle through the cheese. Start gently, the fingers you save may be your own. ;-)
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