First of all, you know there are guidelines for how long a baby - especially a newborn should be in a car seat. I will send truthsweet here as she's the car seat guru! I think its something like 30 mins max for a newborn and then 2 hours for an older baby. There are risks associated with using a car seat for a young baby, but we have to use them IRL. However what you do not need to do is use a car seat beyond travelling time IF you are going to be out for a period of time after that.
So essentially you are both right. I know some people don't like the use of car seats on a chassis, full stop, but for me they are a godsend. We are largely car based and to be able to drive, put my sleeping baby onto a chassis whilst I run into the shop, surgery, baby clinic etc was invaluable. These are examples of when I would use the car seat. With the last two examples, the chances are the baby would be taken out once inside the building anyway.
What I would NOT use the car seat on the chassis for (and it really really irks me to the point where I want to tell the parents!), is to wander around the shops with for a long time (ie more than a quick run in, grab something and run out). If you plan to be more than say 10 minutes (bear in mind your journey time there and back) then I would transfer your baby to the carrycot or later, into the pushchair seat. I often see babies in car seats either with a basket full of different carrier bags underneath ie clearly been in there more than even 30 mins or on a day trip type outing eg a museum or farm, where the baby clearly has been in the car seat a long time and this is really NOT advised.
A baby grows in their sleep. Most babies - especially newborns will sleep on a car journey. If your baby is curled up in a car seat, then their organs can not expand fully. Prolonged periods of time not laid flat (in a carrycot or moses basket, or even on your lap,) means that across time (ie not just on one long journey) the baby's lungs etc are not expanding properly, thus do not grow properly.
So, yes a chassis where a car seat clips on can be very useful especially if you have just finnnnaaaallllly managed to get your grumpy baby to sleep but need to go to the shops for nappies / medicine / chocolate. However if you can remove the baby and put it in a carrycot then that would be better. If you are going anywhere, where you will be walking or sitting more than say 5-10 mins, then I would definitely remove the baby and put them in the carrycot.