You’ll probably hear more about the cracking potential here, but as I understand it, it can happen (but isn’t guaranteed to happen) because wood and metal respond differently to environmental changes in temperature and humidity.
With temperate change, metal and wood can shrink or expand at different rates. With humidity changes, the metal won’t respond at all, while the wood will shrink or expand. These are usually very tiny differentials, but over time, or in extreme conditions like very low humidity, it can cause a crack when the wood tries to move more than the metal liner it’s glued to will allow.
A big part of the fear of cracking with wooden flutes and lined headjoints is due to the condition of antique flutes from the 19th Century, many of which have cracked headjoints. Personally, I think this may be due to simply poor storage conditions, possibly decades in dry conditions while not being played. I’m not sure how much relevance it has to a modern wooden flute made with a fully lined headjoint, where we can be more careful about temperature and humidity extremes. They didn’t have cheap digital hygrometers back in the 19th Century or most of the 20th Century, when these cracks happened to antique flutes.
FWIW, I play a modern (recently made) wooden Rudall-type flute in Cocus with a fully lined silver headjoint. I bought it secondhand so I’m not sure exactly when it was made, but I think probably 15 years ago. It has traveled from Switzerland where it was made, to Italy for most of its life, and it arrived recently here in the USA Pacific Northwest. In the Winter when house heat is on, I keep my practice room at a temperature of around 58-67 degrees (daily cycle), and humidity around 47% rh, never lower than 45%. No cracks so far. I do take the precaution of occasionally rubbing a tiny bit of cork wax on the outside body and headjoint of the flute, which may add a little protection against drying. Or maybe not. It could just be a placebo, but it does make the flute nice and shiny. 
As for playing characteristics… I dunno, I’d have to play an exact copy without the full liner to say anything meaningful about the effect on tone. It sounds way different from my other flute (a blackwood Windward D with unlined head), but it could be the narrower bore, the embouchure cut, or just the way my mouth fits this flute. It has a more pure, less “breathy” tone than the Windward, but I can’t say that’s the liner. I also don’t notice any difference in condensation inside the headjoint. Seems about the same to me, but there are many variables between players and local environment that affect how “wet” a flute gets when played.
