Mine's not a D22, but I know a little about how the EGR works and I'm by the sounds of it, your mate is just trying to convince you to bring the engine back to standard.
EGR is introduced to your engine as a trick, really. It dampens the combustion so that the temperature of combustion is reduced. At higher combustion temperatures, the process produces more oxides of nitrogen which are a dangerous greenhouse gas (and aren't collected for use by dentists, which may be the main reason).
Preventing the exhaust gas from being used does NOT "fully combust" the fuel. Only a small portion of the exhaust gas is recirculated in any case, and by not allowing the full combustion process to occur, there are more particulates left in the exhaust stream (unburnt fuel or incompletely burnt fuel). The reduction in combustion means a reduction in power, and therefore you need more fuel input to achieve the same amount of power - thus EGR = a small, sometimes noticeable reduction in power and economy.
I say "sometimes" because it's not always obvious. The differences are not great, my own vehicle has improved half a litre per hundred kilometres, feels like there's a small improvement in turbo spooling and a marginal improvement in apparent power. It's more perceived than factual - I didn't dyno the thing, so can't conclusively say, but I do record all fuel usage so those figures aren't a guess.
Will the higher combustion temp do any damage? Hopefully not.