The risk is losing position, especially if you're doing it without an arm in. Not necessarily losing position so badly that you end up on bottom, but losing back to guard or neutral. The problem is you only have a grip on the guy's head, and you don't have a chinstrap or anything to keep that grip tight. The process by which you readjust your torso position to expose his neck to choke also often gives him a window to spin away. FWIW, I think throwing arm bars from top mount in MMA is generally a bad idea unless you're already losing the position. The dominant strategy is to just hit him and stay on top, unless you're within 20 seconds or so of the round end and think you're more likely to finish the sub than pound him out in the that time period.
I like it better for pure grappling, just because it's not so easy to finish from top so you need to take more risks, and because without the gloves it's easier to strongly connect your hands and get a good lock on his head. I'm pro N/S choke, I just recognize that it's a lot more positionally sketchy than an RNC or inverted heel hook from inside sankaku.