The purpose of Vanish in Cataclysm is to get back into stealth. If you want to avoid harmful effects, use Cloak of Shadows.
We grew tired, as did many players, of "Vanish never works LOL" so we looped back to the original intent of Vanish being about stealth. That is why the tooltip specifically says that harmful effects won't break Vanish, but does *not* say that the harmful effects won't land. We understand some rogues liked using Vanish to "dodge spells" but the ability was never designed to work that way and never was going to work that way very well. The more we tried to let it be a damage negater, the harder time we had letting it guarantee stealth.
There is a current live bug with pets and guardians being able to still target a vanished rouge. That will be fixed in an upcoming patch. Other than that, we are not aware of any issues that keep the ability from working as advertised. Most concerns seems to be rogues who want it to work a different way.