In theory it could leak..... but so could anything else on the engine that seals with an O-ring.
Maybe the block heater would need the O-ring replaced once every 20 years or so? Doesn't seem like a big issue to me compared to the advantages.
I know Tom B argues this point about potential for coolant leakage. He's not wrong that it is theoretically possible (though even frost plugs leak sometimes too). But, his premise is that rather than using a block heater as a starting aid, you should instead tear down your engine, rebuild it with new rings and pistons and an overbore, install a custom-homebrew extra thin headgasket, and then if necessary hook up a big battery charger and crank the engine for up to 3-4 minutes on the starter continuously, risking damage to starting components and creating massive amounts of smoke ---- and that that is the correct way to start the engine in extreme cold, in lieu of a block heater. I have no doubt whatsoever that the method works for Tom and I respect the goal that a truly perfectly optimized diesel might be able to start using only its own systems even in the most unforgiving conditions. BUT I will also say that for most of the rest of us who are living with engines that may not be freshly rebuilt and with less confidence/desire to push the absolute limits of equipment we depend on daily, plugging in a block heater does seem like an easier route all around.
Living in a cold climate area, I will attest that block heaters are definitely an asset especially if you park outdoors, though if you're in a garage it may matter less as RedArrow pointed out. But if outside, it can make the difference between the engine starting vs not starting in extreme weather, but maybe just as important, makes it nicer to use the car on cold days. It starts quick and easy with the preheat, and your interior heater and defroster are working right away rather than taking the first 10 minutes to start to warm up. Much less wear and tear on the engine internals, plus starter, glow plugs/relay, and battery as well. Extreme cold starting is hard work for all of those components. Less smoke for you and your neighbors too if you are preheated.
The coldest I have started my D24T Volvos without block heater assist is around -15F (at 5000' elevation, which does make it more challenging also). They started but with difficulty and complaining and as I recall it took a few attempts. I tried my wagon one day at -35F and it didn't even think about starting, just cranked and smoked until I gave up out of mercy. I have block heaters in both of them and use them all winter long and when plugged in they start fast and smooth regardless how cold. Great improvement in the quality of life for the car and for me as well.
There's a reason every heavy diesel that operates in cold weather has a block heater. It's the best way to get a diesel going in serious cold.