There is a technique to coil any type of rope, wire, ethernet, extension cord, hose. If done the right way, there should be no harm.
Kinda twist with the material with you index finger and thumb into your left or right hand. I call this a neatly coiled up material.
These ethernet cables are from 2004-2005 CAT5E and still work wonders on my equipment. They've been properly coiled up countless times. Someone in my family actually "pissed me off" coiled it around their back hand and palm one time.
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Yellow.
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You are correct for avoiding PHYSICAL damage to your cables. ALWAYS "free wrap" your cables. In use or in storage. It will prolong there life and makes them so so so much neater

The damage that OP is referring to is to the equipment that is attached to the cable and not the cable its self. But yours is a great tip to share too.
