If the recoil of the rope is not COMPLETELY smooth all the way in, it can cause the problem with premature wear on the pulley teeth. I saw that once with a brand new OEM Husky pulley - for some reason, that pulley seemed to be just a little too tall on the center post, so when the retaining screw was snugged down, it put a bit of pressure on the pulley so it did not turn totally free. It would usually recoil pretty well until almost all the way in, then stop with the handle just a little loose. After a month or two I finally took it apart again and added a thin spacer in there to keep it from bottoming on the post - solved the recoil problem, but by then the damage to the pulley teeth was already done. I suspect the issue was that the slight extra drag on the pulley when the flywheel pawls were just about to slip over the top of the teeth near the end of the recoil was causing that pulley to stop with the pawls just barely hung up on the very top of the teeth, so the pull to start it made them jump and chip every time.
Another new pulley fit and worked perfectly - no more troubles with damaged teeth.