..and if so, what form does such psychological damage take?
My own experience is that damage does occur.
I was 8 years old when my parents became converted, so I wasn't exactly a totally white canvass on which my personality could be painted. But I was a light shade of grey, so the impact of WT teaching was still quite considerable.
I think the most damage that I suffered was in the area of guilt and unworthiness. By the time that I was 12 years old I had become terrified of being disfellowshipped. Could I be disfellowshipped for using bad language at school? Could I be disfellowshipped for telling a fib? For masturbating? For looking at Health & Efficency magazines? The list of probable DF'ing offences seemed endless.
Not wanting to be struck down dead at Armageddon for having some sin on my record book that needed expunging, I fell into the trap of confessing to everything that I had done wrong so that I would not be in an unclean state when the big A occured.
Consequently, our local PO became the recipient of all of my neurosis as I strove to be clean from all sin. When I drove a motor scooter illegally I confessed. When I swore I confessed. When I had lustful thoughts I confessed. I confessed to everything and even exaggerated my wrongdoings so that if I had left anything out I would have some credits in my personal Armageddon bank to draw upon.
My parents became very worried about me, and decided that I was suffering from nervous exhaustion. They prescribed Sanatogen nerve tonic and more ministry work as a cure for my depression. I increased my personal study, knocked on more doors, cut right back on masturbating and did all manner of good works so as to store up some treasure in Heaven and not be found wanting when Armageddon - due any time now - arrived.
I was now 14, my self-esteem non-existent, doing very poorly at school and not much good at anything except for one brief glorious moment when I broke the class record for throwing the discus further than anyone else could.
However, changes were afoot that would serve to raise my self-esteem suffiently enough to become more independently minded, although the imprinted guilt would later arise in my early 40's that would plunge me headlong into a nightmare breakdown..
More later.
Englishman.