The o-ring just by itself will not deform at atmospheric pressure, but when it is installed in the housing and the housing is closed, it is squeezed, and that can deform the ring. It's a matter of time.
That's why it is not recommended to store your housing closed with the o-ring installed.
In fact, there is even a specified test regarding this (compression set, A or B). Different rubber materials have different compression sets.
And I hope there is no housing out there that has an edge pressing against the seal.
Theoretically, if you apply more pressure (going deeper), the o-ring will squeeze against the sealing surface with a force according to the added pressure. If thre pressure is high enough and the housing can widthstand the pressure, then yes, an o-ring can start extruding into the gap between the two sealing surfaces and that can start damaging the material. At which pressure it is going to be a problem depends on the size of the gap and hardness of the rubber material. The silicone grease won't help at that point though. As far as I know the silicone grease is just a means to protect the rubber material from the saltwater (another reason could be to make it easier to close the housing).
Personally, on one occasion I have opened my housing on the dive boat, geared up and ready to jump in, to fix a memory card issue. I would not advise to do that, though
And I probably would not have done that with an expensive camera, but with my 200$ compact it was worth it to me. I also have to change the battery after two, latest three dives, and I have done so many times, also on dive boats. In about 170 dives with a camera I never had a flooded housing, but that is no proof that it won't ever happen. It could happen on my next dive.
If I wouldn't have a reason to open it, I wouldn't though. Not after a day of diving, maybe after a week, maybe after a month...not sure, but at some point I would open the housing and check the o-ring for stuff like indentations. Latest I would open it after the dive trip.